Implications of the new accounting model for leases
Journal Title: EKONOMSKI VJESNIK / ECONVIEWS Review of contemporary business, entrepreneurship and economic issues - Year 2019, Vol 0, Issue 1
Abstract
Leases often appear to be a practical way of securing some property. The advantage of the lease is in easy replacement and minimum engagement of resources for the acquisition of assets. However, sometimes leases, depending on their form, also serve to hide the financing through the so-called “off -balance financing”. With the aim of eliminating these unwanted effects, the IASB has adopted a new standard for leases – the International Financial Reporting Standard 16 Leases. The key change from the previous accounting model for lease recognition is in the financial statements of the lessee. This change results in recognition of lease liabilities for practically all forms of leases. Of course, this also entails recording the appropriate property item of asset in the financial statements. The result of this approach is also significantly different recognition of expenses during rental time, as well as the nature of expense. This applies particularly to operating leases that do not recognize assets and liabilities in the existing model, and the effect on profit and loss is based on a linear model that most often corresponds to the contractual lease payment dynamics. In this paper the authors research the implication of the new accounting model for leases on financial statements.
Authors and Affiliations
Ivan Čevizović, Ivo Mijoč
Keywords
Related Articles
- EP ID EP594077
- DOI -
- Views 74
- Downloads 0
Types of associations and motivations to join: A study with young people in Spain
Although voluntary associations are known to play a very important role in the civic integration of young people, figures of participation in Europe are considerably lower than those registered in countries like the Unit...
Innovativeness and financial resources diversity of Slovenian early-stage enterpreneurs
This paper focuses on the diversity of financial resources for Slovenian early-stage entrepreneurs. In the empirical study, we examined whether early-stage entrepreneurs with different characteristics regarding innovativ...
Critical examination of the IEET measurement instrument for the assessment of textbook quality
As is the case in other sectors of the creative industry, the publishing industry also evaluates its projects finalized in the form of products and services in the market of creative contents. This paper aims to investig...
Structure and conditions for the functioning of the Polish-Czech cross-border market of cultural service
This is a theoretical and empirical article. In the first part, an original definition of the cross-border market for cultural services has been developed, based on classic market definitions. The structure and condition...
Implementation of the General Data Protection Regulation in companies in the Republic of Croatia
This paper deals with the current issue of protecting individuals regarding the processing of their personal data and the free movement of such data. As this matter is also regulated by the European Union legislation, th...