In 2016 FASB and IASB both released new accounting standards for leases. Initially, FASB and IASB started together to develop one new standard. At the end, each board released an own model that have some major differences. Especially challenging for those companies that have to comply with both standards. Although working with one model already has quite an impact on the whole balance of a company.
In short IFRS16 and US-GAAP
IFRS 16 specifies a complete model to identify lease contracts and their management in financial reports of the parties involved with a lease. It will be required to apply this model for all reporting periods on or after 1st January 2019. IFRS16 the current IFRS17, IFRIC 4, SIC-15, and SIC-27. The fundamental differences with the earlier models are mostly for the lessees that need to report about all leases above $5000 and those with a term off 12 months and longer.
US GAAP has a similar accounting method on leases as the IFRS16. The main differences can be found in
- what leases of assets are and/or may be included,
- the threshold of the value of a lease.
- the exemption of short-term leases,
- the lease classifications criteria, and
- the reporting of sales transactions.
MACS: IBM Tririga
Since the release IBM Tririga Real Estate Manager 10.5.1 in 2016, Tririga allows companies to comply with and work along the guidelines of both, the IFRS16 and US Gaap, standards. The latest release of Tririga Real Estate Manager 10.5.2 enhances working with these standards in payment terms. As an IBM Tririga Business Partner MACS can support you in upgrading your current Tririga system to the new standards. Or implementing the Tririga system to replace your current IWMS.