SLFRS 16 Leases – What you need to know

Further to introduction of new leasing accounting standard, IFRS 16, Leases by the International Accounting Standard Board, the Institute of Chartered Accountants of Sri Lanka has issued new accounting standard, SLFRS 16, Leases which is effective from financial period beginning 1st January 2019 or thereafter.

SLFRS 16 eliminates the classification of leases as either operating or finance for lessees and instead, introduce a single lessee accounting model. This model reflects that leases result in a Company obtaining the right to use an asset at the start of the lease and, because most lease payments are made over time, also, obtaining financing. As a result, the new standard requires lessees to account for all of their leases in a manner similar to how finance leases were treated applying LKAS 17.

It is our pleasure to share our latest technical alert, which provides high level overview on SLFRS 16 and its application.

We trust you will find this useful. Should you require any clarifications, our technical consultant team will be happy to assist you.