Leasing companies expect ‘business as usual’ under new accounting rules

A major shift in accounting standards affecting leasing arrangements will take effect in 2019. In January of that year, the Philippines will adopt the International Financial Reporting Standard or IFRS 16, the new accounting standard governing leases.

According to IFRS, the body that sets international accounting standards, the objective of IFRS 16 is to “report information that (a) faithfully represents lease transactions and (b) provides a basis for users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases.” It adds: “To meet that objective, a lessee should recognize assets and liabilities arising from a lease.”