LEASING ACCOUNTING ACCORDING TO INTERNATIONAL REGULATIONS

The standard also provides exceptions for the tenant in choosing the concrete rules of recognition, evaluation and presentation.

The exceptions relate to the fact that a lessee may choose not to apply the provisions relating to recognition from the date of commencement of the contract, subsequent valuation and disclosure, for short-term leases (contracts for a maximum period of twelve months) and for leases for which the underlying asset has a low value (e.g. tablets, personal computers, small items of furniture, telephones).

In the case of short-term leasing contracts, the choice must be made according to the underlying asset class associated with the right of use.

An asset class is a group of underlying assets of a similar nature and use used by the entity in its business. In the case of leasing contracts in which the underlying asset has a low value, the choice can be made for each leasing contract. In these cases, where the lessee chooses not to apply the general rules provided by the standard for situations that do not fall under the exceptions, he must recognize the leasing payments associated with the leases as an expense, using either a linear basis throughout the duration of the lease contract, or another systematic basis, if it is more representative of the benefit model received by the lessee.

The principles contained in IFRS 16 regarding the reflection of leases in the lessee’s accounts are:

Regarding the moment of recognition, on the date of the beginning of the contract, a lessee must recognize an asset related to the right of use and a debt arising from the leasing contract.

On the occasion of the initial valuation of the asset related to the right of use, a lessee must assess the cost of the asset related to the right of use.