Singapore

Details

  • Type: Business and industry issue, Publication series
  • Date: 5/23/2013

KPMG IFRS Publication: In the Headlines – Leases 

In a major shake-up of lease accounting, the IASB and FASB have published proposals to bring most leases on-balance sheet for lessees. A dual model would apply, based on a new lease classification test, which would impact the profile of lease income or expense recognised over the lease term.

Implementing the proposals would be a real challenge for many organisations. The impacts – including significant effort to identify leases and extract lease data, changes in financial metrics, and balance sheet volatility – would be felt across sectors.

Companies that lease high-value assets would see large increases in reported liabilities, while companies with large volumes of lower-value leases could face high implementation costs.

Mr Kenny Tan, Partner with Accounting Advisory Services at KPMG in Singapore who leads the leasing standard implementation said: “Implementing these proposals would be a real challenge for many organisations, as they would need to identify all their leases, extract let data, make new estimates and judgements, and perform new calculations. Companies will also need to consider how these proposals would affect their business practices, systems and processes and performance measurement.”

This publication helps you understand what the proposals could mean for your business.