New IFRS 16 Accounting Standard Effective From 2019

The new IFRS 16 accounting standard will come into force on January 1, 2019. The standard will regulate the valuation and accounting of leases – and thereby tenancy agreements as well.

Many companies have only this year left to adapt their lease accounting arrangements to the new standard. Corporates in particular (i.e. companies whose core business is not real estate) are struggling to obtain all the information they need to make the necessary changes. Drees & Sommer is assisting companies develop and implement professional rental management procedures as part of their real estate management operations.

Time is growing short for capital market-oriented companies – especially those listed on a stock exchange – whose accounts are prepared in line with the international accounting principles issued by the International Accounting Standards Board (IASB). In specific terms, companies involved in retail, logistics, transportation or telecommunications are particularly affected, as are hotels and banks. These types of companies tend to have buildings or other high-value assets that they rent out or lease to third parties. Up to now, these have generally been shown as operating leases in the notes to the accounts rather than in the balance sheet.

For further information please read our press release.