A critical analysis of the accounting for sale and lease back transactions under the new IFRS 16

Resumo

Purpose – The purpose of this work is to access the treatment of sale and lease back transaction in regards of the introduction of the new leasing standard IFRS 16 and determine its consequences for businesses. Due to these far-reaching changes, the accounting for sale and lease back transactions in accordance with IFRS 16 is critically analyzed and evaluated in regards of the purpose and selected principles of IFRS accounting. In addition, a comparison is made with the provisions of IAS 17. Further, this research aims to identify potential room for avoiding the consequences of IFRS 16 and links these findings to the practice. Design/methodology/approach – The research was divided into different parts. First of all, the theoretical foundation is determined with using IASB materials regarding the new lease standard to investigate possible differences occurring to IFRS 16. Based on a practical example, the accounting procedure for a sale and lease back transaction under IFRS 16, for both involving parties, is shown. The findings are discussed and linked, especially in regards of the purpose and various possibilities IFRS 16 offers. Findings – The introduction of IFRS 16 bears far reaching changes for business. A sale and lease back transaction under IFRS 16 leads in contrast to IAS 17 (assuming operating lease) to an on-balance sheet accounting. Research limitations/implications – It is not necessary to present a full analysis and review of the new standard. Practical implications – IFRS 16 will have a significant influence on future balance sheets, analyses and company valuations. This work can serve companies as well as auditor and accountants as a guideline for the treatment of sale and lease back transactions under IFRS 16 and demonstrates the accruing consequences. Originality – To the knowledge of the author, this is the first study that combines a comparison a of IAS 17 and IFRS 16 with the treatment of sale and lease back transaction and determines its purpose as well as consequences for businesses using a practical example.

Ficha do documento

Tipo

Dissertação

Ano

2018

Instituição

Fundação Getulio Vargas

Fonte

Repositório da FGV

Idioma

Inglês

Acesso

Acesso aberto

Identificador

oai:repositorio.fgv.br:10438/24737

Temas

Administração Pública

Palavras-chave

Sale and lease back transactionIFRS 16VendaArrendamentoAdministração públicaContabilidade - NormasArrendamento mercantil