X

IFRS Banner

IFRS Course

IFRS Icon

IFRS and US GAAP Accounting for Leases (2 days)

Course Details

Code:1322
Select a start date for more details
Zurich
09 Dec - 10 Dec 2019
Do you need to train a group of employees?
Tell us your training needs, and we will plan an agenda to address the issues that matter most to your organization.
Enquire Now

Introduction

This program provides in-depth coverage of the new IFRS and US GAAP lease accounting standards. In January 2016 the International Accounting Standards Board (IASB) published IFRS 16, which supersedes IAS 17 (and related Interpretations) for annual periods beginning on or after 1 January 2019. The US Financial Accounting Standards Board (FASB) published Topic 842, its own new leasing standard, in February 2016: public business entities must apply the new provisions for fiscal years beginning after December 15, 2018.

Leasing has proved an important and flexible source of financing. Existing accounting rules produce different results, depending on whether a lease is classified as a finance (US GAAP uses the term ‘capital’) or an operating lease. Lessees currently account for operating leases off balance sheet and merely disclose the commitment to pay future rentals as a note to the financial statements. Listed companies using IFRS or US GAAP are estimated to have around $3.3 trillion of lease commitments, 85% of which do not appear on the balance sheet. Under the respective IFRS and US GAAP Conceptual Frameworks, all leases produce assets and liabilities that meet the criteria for balance sheet recognition but accounting by lessees for operating leases has been exempted from this treatment. Users often try to estimate the impact of the off balance sheet lease obligations, with limited accuracy.

The IASB and the FASB have jointly developed their new standards over a number of years and have reached the same conclusions in many areas:

  • Definition of a lease
  • Recognition by lessees of leases on the balance sheet
  • Measurement of lease liabilities
  • Lessor accounting unchanged, i.e. the finance and operating lease distinction remains for lessors
  • Enhanced disclosure requirements

However the Boards have not been able to agree on all matters, notably the pattern of recognizing expenses by lessees in the income statement and an exemption for low value assets.

This two-day course provides an in-depth review of the new standards.

Using case studies, examples and exercises, our specialist instructors explain and illustrate all the important issues.

This program answers questions such as:

  • How must arrangements be analyzed to determine whether they contain leases?
  • How are contracts separated into lease and service components?
  • How are leases accounted for in the financial statements of lessees?
  • How does IFRS and US GAAP differ?
  • What are the enhanced disclosure requirements?
  • What are the transitional provisions?
  • What are the practical implications for lessees, lessors and users of the new standards?

Learning Objectives

  • Comply with the new accounting and disclosure requirements for leases
  • Analyze contracts to determine whether they contain leases
  • Apply the rules for initial and subsequent measurement by lessors and lessees
  • Know the differences between IFRS and US GAAP
  • Plan for the implications of the new accounting standards for leases – what it means for you

Who Should Attend

This course is primarily designed for those who are engaged in leasing activities in their company or are considering doing so in the future. The course is applicable to treasury staff, industry controllers, accountants, analysts, internal and external auditors and other finance professionals who are interested in learning the impending changes to lease accounting.

Topics

  • Leases
    • Defining a lease
    • Separating a contract into lease and service components
    • Recognition exemptions for short-term leases and leases of low value assets
    • Determining the lease term
  • Lessee Accounting
    • Recognition
    • Measurement - initial and subsequent
    • Presentation
    • Disclosure
  • Lessor Accounting
    • Classification as operating or finance/capital leases
    • Finance leases - recognition and measurement
    • Operating leases - recognition and measurement
    • Presentation
    • Disclosure
  • Sale and Leaseback Transactions
    • Assessing whether a transfer is a sale
  • Differences between IFRS and US GAAP
  • Transitional Rules - options
  • Practical Implications
    • Effects on different sectors - financial statements and performance measures
    • Financial covenants

Teaching Method

  • Group live instruction by specialist instructors
  • Description and explanation of IFRS technical requirements in clear and simple language
  • Use of case studies and real-world examples to illustrate practical application of the standards
  • Interactive participation is encouraged
  • All participants receive a comprehensive binder containing copies of the presentation slides, handouts and other course materials

Instructors

The instructor for this course will be drawn from one of our core faculty of subject matter experts. Further details will be published at the earliest opportunity.

Venue

Our seminars take place in 4 star professional conference facilities, generally in city-centre hotels like the Marriott, Sheraton or Hilton brands. Detailed Joining Instructions are sent to all registered delegates by email approximately one month before the event. The Joining Instructions will confirm exact venue details and nearby (or onsite) hotel recommendations with bedroom rates where available. Coffee and lunch will be provided.

CPE/CPD Accreditation

IASeminars is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org .

 

Field of study: Accounting

Prerequisites

Understanding of basic accounting principles based on any national standards. No advance preparation is required for this course.

Settings