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IAS 17 classifies leases into two types: an operating lease if the lease does not transfer substantially all the risks and rewards incidental to ownership. IAS 17 prescribes lessee and lessor accounting policies for the two types of leases, as well as disclosures.
IAS 17, Leases takes the concept of substance over form and applies it to the specific accounting area of leases. When applying this concept, it is often deemed necessary to account for the substance of a transaction – ie its commercial reality, rather than its strict legal form.
IAS 17 will be superseded by IFRS 16 Leases as of 1 January 2019. The objective of IAS 17 (1997) is to prescribe, for lessees and lessors, the appropriate accounting policies and disclosures to apply in relation to finance and operating leases.
18 lis 2016 · IAS 17 – Operating leases off-balance sheet as a single expense. Finance leases on balance sheet. IFRS 16 – Operating leases recognise assets and liabilities on balance sheet. Operating leases to report depreciation and interest separately. Why the difference? Improved comparability and transparency on balance sheet.
IAS 17 International Accounting Standard 17 Leases Objective 1 The objective of this Standard is to prescribe, for lessees and lessors, the appropriate accounting policies and disclosure to apply in relation to leases. Scope 2 This Standard shall be applied in accounting for all leases other than:
What does IFRS 17 involve? Deferral of new business profits in line with the service provided. Under the default model, a contractual service margin (CSM) is created on the balance sheet which is effectively a stock of future profit.
IAS 17 sets out the required accounting treatments and disclosures for finance and operating leases by both lessors and lessees, except where IAS 40 is applied to investment property held by a lessee.
