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FRS 116: Leases - Preparing for the New Standard

Expert Speaker Low Kin Yew

$650.00 (including GST)

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Overview

Under the new leasing standard, FRS 116, a lessee will now have to recognise all leases in the Balance Sheet. Implementing the new standard will therefore require significant effort. Companies will now have to identify and review all lease contracts, identify the lease, determine the lease term, determine the present value of the lease asset and liability and prepare the new disclosures. In addition, the new FRS deals with changes in option to renew periods and modifications to the lease agreement.

This programme is part of the Corporate Practice Series, designed specifically for accountants and finance leaders. This technical workshop will use practical and numerical examples to discuss best practices in handling the new requirements, avoiding the pitfalls and how to be prepared now, for the impending changes of FRS 116.

Programme Outline

The Rationale behind FRS 116 Leases

  • The IASB’s Leases Project
  • Comparison between current and new standard:

  • Similarities
  •  Lessees to recognize leased assets and lease liabilities,
  •  Definition of a lease

  • Differences
  • Single lessee model instead of a dual model
  • Additional recognition exemption for lessees
  • Option for lessees to account bundled arrangement as a single lease and use estimates to separate lease components and service components in bundled arrangements
  • Simplified measurement for inflation-linked and variable lease payments as well as simplified reassessment requirements for variable lease payments and optional lease payments
  •  Different disclosure requirements
  •  Transition options
  • Additional disclosure requirements for lessors
  • Divergence between IFRS & US GAAP on lease accounting

Key changes – what does this mean for businesses?

  • Analyse and review the impact on companies’ financial statements:
  • Statement of financial position
  • Statement of comprehensive income
  • Statement of cash flows

Numerical illustrations and Practical examples

  • Illustrative approach to the application of the new accounting treatment of lease contracts:
  • How to make journal entries for financial statements
  • Examine the types of presentation disclosure requirements
  • Find out the impact on financial ratios

Transitional provisions

  • How has the accounting treatment changed?
  • What are the transitional provisions?

Next steps in preparing for the new standard

Broad recommendations on requirements for businesses transiting from current to the new standard

Expert Speaker

Low Kin Yew is an Associate Professor of Accounting (Practice) at the Nanyang Business School of Nanyang Technological University and the School’s Associate Dean (Undergraduate Academic). He has a Bachelor of Accountancy degree (First Class Honours) from the National University of Singapore and a Ph.D. in accounting from the University of Illinois at Urbana-Champaign.

Since joining the Nanyang Business School, he has taught accounting and auditing courses at both the undergraduate and graduate (MBA and EMBA) levels. He has won the Researcher, Teacher and Teacher of the Year Award of the Division (Accounting), and the Nanyang Excellence Award in Teaching. Prior to joining Nanyang Technological University, he worked in the Singapore office and Sydney (Australia) office of a Big 4 accounting firm. He is a member of both the Institute of Chartered Accountants of Australia (ICAA) and Institute of Singapore Chartered Accountants (ISCA). He is currently a member of ISCA's Financial Reporting Committee. He is a co-author of two accounting textbooks: A Practical Guide to Financial Reporting Standards (Singapore), 5th edition, 2013, CCH, and Intermediate Accounting IFRS Edition, Global edition, 2012, McGrawHill.

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