Implications of the new accounting model for leases
Leases often appear to be a practical way of securing some property. The advantage of the lease is in easy replacement and minimum engagement of resources for the acquisition of assets. However, sometimes leases, depending on their form, also serve to hide the financing through the so-called “off -b...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Faculty of Economics and Business in Osijek
2019-01-01
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| Series: | Ekonomski Vjesnik |
| Subjects: | |
| Online Access: | https://hrcak.srce.hr/file/323693 |
| _version_ | 1797335170306539520 |
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| author | Ivan Čevizović Ivo Mijoč |
| author_facet | Ivan Čevizović Ivo Mijoč |
| author_sort | Ivan Čevizović |
| collection | DOAJ |
| description | Leases often appear to be a practical way of securing some property. The advantage of the lease is in easy replacement and minimum engagement of resources for the acquisition of assets. However, sometimes leases, depending on their form, also serve to hide the financing through the so-called “off -balance financing”. With the aim of eliminating these unwanted effects, the IASB has adopted a new standard for leases – the International Financial Reporting Standard 16 Leases. The key change from the previous accounting model for lease recognition is in the financial statements of the lessee. This change results in recognition of lease liabilities for practically all forms of leases. Of course, this also entails recording the appropriate property item of asset in the financial statements. The result of this approach is also significantly different recognition of expenses during rental time, as well as the nature of expense. This applies particularly to operating leases that do not recognize assets and liabilities in the existing model, and the effect on profit and loss is based on a linear model that most often corresponds to the contractual lease payment dynamics. In this paper the authors research the implication of the new accounting model for leases on financial statements. |
| first_indexed | 2024-03-08T08:33:02Z |
| format | Article |
| id | doaj.art-21a31400a7e848caac8bc4b04e8b30f3 |
| institution | Directory Open Access Journal |
| issn | 0353-359X 1847-2206 |
| language | English |
| last_indexed | 2024-03-08T08:33:02Z |
| publishDate | 2019-01-01 |
| publisher | Faculty of Economics and Business in Osijek |
| record_format | Article |
| series | Ekonomski Vjesnik |
| spelling | doaj.art-21a31400a7e848caac8bc4b04e8b30f32024-02-02T02:23:07ZengFaculty of Economics and Business in OsijekEkonomski Vjesnik0353-359X1847-22062019-01-01321195207Implications of the new accounting model for leasesIvan Čevizović0Ivo Mijoč1Čevizović j.t.d., Zagreb, CroatiaJosip Juraj Strossmayer University of Osijek, Faculty of Economics in Osijek, Osijek, CroatiaLeases often appear to be a practical way of securing some property. The advantage of the lease is in easy replacement and minimum engagement of resources for the acquisition of assets. However, sometimes leases, depending on their form, also serve to hide the financing through the so-called “off -balance financing”. With the aim of eliminating these unwanted effects, the IASB has adopted a new standard for leases – the International Financial Reporting Standard 16 Leases. The key change from the previous accounting model for lease recognition is in the financial statements of the lessee. This change results in recognition of lease liabilities for practically all forms of leases. Of course, this also entails recording the appropriate property item of asset in the financial statements. The result of this approach is also significantly different recognition of expenses during rental time, as well as the nature of expense. This applies particularly to operating leases that do not recognize assets and liabilities in the existing model, and the effect on profit and loss is based on a linear model that most often corresponds to the contractual lease payment dynamics. In this paper the authors research the implication of the new accounting model for leases on financial statements.https://hrcak.srce.hr/file/323693leaseoperatingfinancialIFRS 16present valuediscounting |
| spellingShingle | Ivan Čevizović Ivo Mijoč Implications of the new accounting model for leases Ekonomski Vjesnik lease operating financial IFRS 16 present value discounting |
| title | Implications of the new accounting model for leases |
| title_full | Implications of the new accounting model for leases |
| title_fullStr | Implications of the new accounting model for leases |
| title_full_unstemmed | Implications of the new accounting model for leases |
| title_short | Implications of the new accounting model for leases |
| title_sort | implications of the new accounting model for leases |
| topic | lease operating financial IFRS 16 present value discounting |
| url | https://hrcak.srce.hr/file/323693 |
| work_keys_str_mv | AT ivancevizovic implicationsofthenewaccountingmodelforleases AT ivomijoc implicationsofthenewaccountingmodelforleases |