Key points
The revised Exposure Draft is expected in the last quarter of 2011. The new IFRS is expected in the second half of 2012, with the effective date not expected to be before 2015.
In the meantime, Lessees should consider the impact on their financial statements of having to recognise a right of use asset and a lease liability. If it causes a problem with bank covenants, solvency tests or ratios based on EBITDA, then there is still plenty of time to take action.
For Lessors, the accounting model for lease agreements will change with the recognition of a residual asset as well as a lease receivable. Additionally, customers may require guidance on how to account for their lease agreements.
About the survey
The International Accounting Standards Board (‘IASB’) together with the US standard setter the Financial Accounting Standards Board (‘FASB’) issued their Exposure Draft Leases in August 2010. The proposals will radically alter the way that leases are accounted for by lessees and lessors.
The KPMG Lease survey took place in July 2011 with the aim of ascertaining the perceived impact of the proposed leasing standard on New Zealand companies. The methodology was a short online survey aimed at those responsible for the leasing decision.
We received over 320 responses from a wide variety of New Zealand organisations, in a wide variety of business sectors, who controlled over 45,000 leases in total.
2012 survey
We plan to repeat the survey again next year to assess how perceptions have changed following the issue of the final Exposure Draft.