When can we say that the IASB is done and dusted with issuing IFRS Standards? The answer to that question is probably “Never” because the IASB is constantly working on improving existing standards or issuing new ones thereby making the Standards an ongoing Work-in-Progress.
In 2015, the IASB targets a Revised IFRS on Leases. It is also redeliberating on IFRS 4 Insurance Contracts though the FASB has temporarily decided to go it alone on Insurance Contracts. An Exposure Draft on the Conceptual Framework is expected soon and there are discussion papers out on accounting for Dynamic Risk Management – a Portfolio approach to Macro Hedging and Rate regulated activities. There are upcoming Discussion Papers on Disclosures too.
We will focus on the two major Standards that would impact Industry: Leases and Insurance Contracts. There are other minor amendments to existing Standards, which are touched upon.
5.1 IFRS 16 Leases
5.1.1 Industries Impacted: Airline industry, Retail industry and All Industries that have Leases as an integral part of their business
The revised Standard on Leasing turns the concepts of “Operating Lease” and “Finance Lease” that everyone is familiar with on its head and proposes a radically different approach.
5.1.2 Significant Changes
The new Standard mandates that for lessees, all leases must be on balance sheet if the Lease Term is greater than 12 months. Entities are supposed to reassess each ...