Purpose:This assignment aims at developing a clear understanding of students on Accounting standard for lease.Students are required to critically examine the new accounting standard for lease...

Running Head: Lessee and Lessor Accounting
Lessee and Lessor Accounting
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Contents
Abstract    3
Evaluation of the old accounting standard for lease (AASB 117)    3
Change necessary    4
Changes have been incorporated in the new accounting standard for lease AASB 16    5
How will companies that have significant level of lease financing be affected by the change in the accounting standard for lease?    6
In the former accounting standard for lease (AASB 117) both operating lease and finance lease were allowed    6
According to the IASB, the implementation of IFRS 16    7
The implementation of AASB 16, reporting entities might be more likely to buy more assets and lease fewer assets.    8
Key disclosures the company has made on its accounting for leases    11
The key features of AASB 16 at Atomos Ltd are as follows:    11
Lessee Accounting    11
Lessor Accounting    11
Conclusion    12
References    13
Abstract
Leasing is most significant activity and is used widely for short as well as lasting financing of assets of many entities. Because of pervasiveness of the lease, it’s also significant that users have complete and comprehensible financial statements available to obtain an overview of the entity's leasing activity. This report outlines the importance of new AASB leasing standard 16, which will apply from 1 January 2019 or later (annual period). Analysis of report is depends on the AASB, professional websites, literature and magazine articles. Analysis of this report includes a comparison of existing and new lease standards with improvements and benefits made from current AASB 117. It was found that AASB 16 was expanded because of the limitation of the existing AASB 117. The development of "Lease" project     by the ISAB as well as FASB has been examined and completed for the concluding IFRS 16, which is the Lease Project results, which are equivalent to the AASB 16, have resulted in better faithful representation as well as reliable financial statement information for all users. Finally, report will be provide data to an Australian business that will also adopt innovative AASB 16. And report will assess the change and effects of AASB 16.
Evaluation of the old accounting standard for lease (AASB 117)
The report aims to providing a detailed interpretation of the AASB 16, which will be considered the current lease standards, AASB 117. The FASB and its results and the AASB 16 (Bauman & Francis, 2015). The contrast will also include accounting adjustments for example presentation of the balance sheet, classification, moreover changes in future effects. Lessee / lessor accounting As a result, the growth of proposals / versions at every level of standard will also be examined to interpret the development and final results of the FASB / IASB Combined Lease Projects. Then, practical aspects of AASB implementation 16 or the impact on Australia's financial statements will be study. This report will strengthen the perceptive of innovative lease standards, AASB 16, improved criteria for recognizing leasing-related assets as well as liabilities or greater transparency. Under the lease “AASB 117” / IAS 17, lessees were needed to include leased financial positions and the related “finance lease” liabilities as a lease classification, while another leased asset and related balance sheet liabilities (ie, resulting from “operating leases”) (Bauman & Francis, 2015). Recognizing that they do not recognize assets as well as liabilities connected to operating a leases in lessee's economic position, a fair lease transaction that results from misleading information, as a result of which the airline standardizes leasing or financing as a lease classification for lessee as needed by AASB 117 / IAS 17, and has rather introduced lessee's single accounting model for the all lease with the maturity of twelve months (Graham & Lin, 2018).
Change necessary
The United State Securities and Exchange Commission, stakeholders moreover other users, FASB and the IASB have converged to launch a Lease Project. The current standard has been criticized for not providing reliable representation in financial statements or economic position of the industries leasing transactions. In addition, the SEC reported in 2005 that lease commitments in financial statement is not transparent due to off-balance sheets activities. AASB 117 off-balance sheets lease liabilities led to important unavailability of data for listed industries to disclose approximately $ 3 trillion in 2014 (Gross, Huston & Huston, 2014). Hence, the newest AASB 16 (IFRS 16 equivalent) leasing standard controversy issued by the AASB issued in February 2016 AASB 16, Leases. AASB 16 includes IFRS 16, Leases, issued by global Accounting Standard Board without any adjustment that is assets to use and lease obligations. For lessors, distinction between the operating / finance leases moreover lease accounting remains largely un-changed. The Standard supersede the last Standard moreover the related Interpretation and Lease of New Definition, the use of which is a contract or incorporation, AASB 16 is efficient for period start on and after 1 January 2019, with prior acceptance only when AASB 15 has been used. customer contracts (He, Evans & He, 2016).
Changes have been incorporated in the new accounting standard for lease AASB 16
AASB 117 for a lessee classifies a lease as an operating / finance lease when \ innovative AASB 16 removes off balance sheet in the AASB 117 lease classification or all lease leasing as a finance lease. But, exemptions apply to below twelve-month rents short-term as well as low-value rents. The main goals of the project were to recognize all leasing contracts as assets to use rights so that all leasing contracts could be placed on the full...