The new IFRS lease accounting standard will have business implications for all real estate landlords

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The proposed changes to lease accounting would have practically all leases recorded on the balance sheet of lessees, removing the distinction between operating and financing leases. Lease obligations will be reflected as liabilities on the balance sheet with a corresponding ‘right-to-use’ asset. The consequences of the proposed lease accounting changes are far reaching, and are likely to be the most profound accounting change in decades.

The proposed changes particularly will impact lessees (i.e., tenants) with significant real estate leases including leased buildings, or space in a building, head offices and retail premises.