ACCT6007: The new accounting standard for leases AASB - Accounting Assignment

Internal Code: MAS5882

Accounting Assignment :

The new accounting standard for leases AASB 16 Leases developed by the International Accounting Standards Board (IASB) was adopted and issued by the Australian Accounting Standard Board (AASB) in February 2016. AASB 16 Leases will replace the current standard AASB 117 Leases from the annual reporting periods beginning on or after 1 January 2019. Prior to the issue of AASB 16 Leases, the Financial Accounting Standard Board (FASB) and the IASB jointly developed exposure drafts (EDs) for feedback from stakeholders. Churyk, Reinstein and Lander (2015) discussed the practical implications of these EDs on preparers and users of general purpose financial statements. Questions: 1) Explain two fundamental characteristics of financial information stated in the AASB’s Framework for Preparation and Presentation of Financial Statements 2) Identify and explain how compliance with the new standard for leases, i.e. AASB 16 Leases, affects lease accounting and reporting, and business metrics by the lessee and lessor as discussed in Churyk, Reinstein and Lander (2015), i.e. practical implications. 3) Explain if you think compliance with AASB 16 requirements identified in Part (2) results in the reporting of lease information that satisfies two fundamental characteristics specified in the Framework. 4) Criticise the extent to which the discussion on practical implications of new accounting for leases presented by Churyk, Reinstein and Lander (2015) considers two fundamental characteristics of financial information stated in the AASB’s Framework for Preparation and Presentation of Financial Statements.