Transition to IFRS vs IFRS 16
Posted: 03 Mar 2024, 12:23
Hi,
Following adoption of IFRS, the accounting regulatory body in our country issued the following directive for entities applying IFRS for the first time
Offsetting assets and liabilities: If application of International
Financial Reporting Standards for leases, IFRS 16, at first time
adoption of IFRS resulted in recognition of right of use asset and
lease liability, the lease liability should be offset against the right of use asset and the excess asset amount net of tax, if any, should be credited to non-distributable account “IFRS Adoption
Remeasurement Reserve”
This is obviously against the requirements of IFRS 16. What will be the consequences on the application of this directive in the financial statements? Can the entities claim full compliance of IFRS given this departure?
Following adoption of IFRS, the accounting regulatory body in our country issued the following directive for entities applying IFRS for the first time
Offsetting assets and liabilities: If application of International
Financial Reporting Standards for leases, IFRS 16, at first time
adoption of IFRS resulted in recognition of right of use asset and
lease liability, the lease liability should be offset against the right of use asset and the excess asset amount net of tax, if any, should be credited to non-distributable account “IFRS Adoption
Remeasurement Reserve”
This is obviously against the requirements of IFRS 16. What will be the consequences on the application of this directive in the financial statements? Can the entities claim full compliance of IFRS given this departure?