THE ROLE OF A PROFESSIONAL STATEMENT IN THE APPLICATION OF A SINGLE MODEL OF ACCOUNTING FOR LEASE ACCORDING TO IFRS 16 “LEASE”

Abstract

The necessity of applying professional statement in determining the principles of initial and subsequent valuation of leased assets and liabilities of the lessee is substantiated; the choice of discount rate, lease term, components of lease payments due to the use of a new approach to the lease accounting in accordance with IFRS 16 “Lease”. The article discusses the main provisions of IFRS 16 “Lease”. New approaches to the reflection of lease transactions in the lessee's accounting according to a single lease accounting model have been identified. Under this model, any lease, whether operating or financed, should be recognized in both the lessee’s assets and liabilities. Features of the initial assessment of the lease obligation, by discounting future lease payments using the interest rate set in the lease agreement, or the rate of raising additional borrowings for the entity under the current financing agreements in the same currency. The main provisions of further accounting of lease agreements are outlined. Thus, after the date of commencement of the lease, the lessee recognizes the following components in profit (loss): interest on the lease obligation; variable lease payments not included in the estimate of the lease liability for the period; depreciation of the asset from the right of use; impairment losses on an asset use right. The main financial consequences of the application of IFRS 16 “Lease” are determined, namely: reflection in the lessee's financial statements of property rights, financial obligations, depreciation of the asset for use rights and financial expenses on lease obligations. This provision of detailed information by tenants will enable users of the financial statements to assess the impact of the lease on the entity’s financial position, financial performance and cash flows, and therefore the exposure to the risks associated with the leases.