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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


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

 

 

Focus:



Additional references issued by Standard Setters and Regulators
file/media/general/SMP-and-SME-Resource-Centre/901BTRIBe.gif The Institute Standard Setting Department
file/media/general/SMP-and-SME-Resource-Centre/901BTRIBe.gif IASB

 

 

Useful references issued by other organisations
file/media/general/SMP-and-SME-Resource-Centre/901BTRIBe.gif

BDO

file/media/general/SMP-and-SME-Resource-Centre/901BTRIBe.gif

Deloitte

file/media/general/SMP-and-SME-Resource-Centre/901BTRIBe.gif

EY

file/media/general/SMP-and-SME-Resource-Centre/901BTRIBe.gif

KPMG

file/media/general/SMP-and-SME-Resource-Centre/901BTRIBe.gif

PwC

file/media/general/SMP-and-SME-Resource-Centre/901BTRIBe.gif

Zhonghui

 

 

Aplus articles
file/media/general/SMP-and-SME-Resource-Centre/901BTRIBe.gif

February 2016: A new life on leases

file/media/general/SMP-and-SME-Resource-Centre/901BTRIBe.gif February 2016: The intricacies of implementing the new leases standard
file/media/general/SMP-and-SME-Resource-Centre/901BTRIBe.gif December 2016: What you need to know about the new leases standard
 901BTRIBe October 2018: Lessee accounting: Farewell to Hong Kong Interpretation 4
 901BTRIBe December 2018:  HKFRS 16 – Frequently asked questions on leases discount rate
   
   
Last updated: July 2019

 

Frequently used resources

 
 



Technical enquiries

  Click here to submit questions on standards issued by the Institute.
   
 
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