HKFRS 16 Leases

 

  


Technical Resources

 

This webpage contains pronouncements, guides and articles that are relevant
to HKFRS 16 Leases.

 

Effective Date

Financial periods beginning on or after 1 January 2019.

 

Affected standards

Supersedes HKAS 17 Leases, HK(IFRIC)-Int 4 Determining whether an Arrangement contains a Lease, HK(SIC)-Int 15 Operating Leases—Incentives and HK(SIC)-Int 27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease.

  

Why do we need a new standard

The previous lease accounting model required lessees and lessors to classify their leases as either finance leases or operating leases and account for those two types of leases differently. That model was criticised for failing to meet the needs of investors and analysts because it did not always provide a faithful representation of leasing transactions. In particular, it did not require lessees to recognise assets and liabilities arising from operating leases (they were "off balance sheet leases"). As a result, many investors and analysts adjusted the amounts reported in a lessee’s financial statements to reflect the assets and liabilities arising from off balance sheet leases, and make other consequential adjustments. However, because of the limited information available, the estimates made were often inaccurate. In addition, many other investors did not make adjustments. This created asymmetry and inaccuracy of information in the market.

 

 

Click below for more information


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Additional references issued by Standard Setters and Regulators 
file/media/general/SMP-and-SME-Resource-Centre/901BTRIBe.gifUseful references issued by other organisations
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Focus:



Additional references issued by Standard Setters and Regulators
file/media/general/SMP-and-SME-Resource-Centre/901BTRIBe.gifHKICPA Standard Setting Department
file/media/general/SMP-and-SME-Resource-Centre/901BTRIBe.gifIASB

 

 

Useful references issued by other organisations
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BDO

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Deloitte

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EY

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KPMG

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PwC

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Zhonghui

 

 

Aplus articles
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February 2016: A new life on leases

file/media/general/SMP-and-SME-Resource-Centre/901BTRIBe.gifFebruary 2016: The intricacies of implementing the new leases standard
file/media/general/SMP-and-SME-Resource-Centre/901BTRIBe.gifDecember 2016: What you need to know about the new leases standard

 

 

 

 
 
 
Last updated: August 2017

 

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