What To Know About AASB 16
                     What To Know About AASB 16
What To Know About AASB 16
Do you need to comply with AASB 16? The Nakisa lease 
accounting software will allow you to quickly and easily comply 
with the new standard. After transitioning, your lease 
accounting program can be scaled by automating the most 
time-consuming tasks in your record-to-report process. 
So what exactly is AASB 16? It is a new lease accounting 
standard that was published by the Australian Accounting 
Standards Board in February 2016. It changes the way that 
organizations account for leases in their financial disclosures, 
especially their income statements and balance sheets. It 
replaces the earlier lease accounting standard, which was 
AASB 117.
What To Know About AASB 16
The main purpose of AASB 16 is to close a major accounting 
loophole from AASB 117 – off-balance sheet operating leases. 
It is important to know that the new Australian leases standard 
is heavily based off of IFRS 16, which is the international leases 
standard. It only varies on a few negligible details.
Before you go ahead to purchase an AASB 16 lease accounting 
software, it would be a good idea to know what lease 
accounting is. The lease accounting standards form the basis 
of how companies must account for their leases. Leases may 
be for real estate or equipment and are classified as either 
capital or operating leases. 
What To Know About AASB 16
AASB 16 will change how companies account for leases. It 
removes the operating classification for leases, something 
which in turn eliminates the ability of corporations to report 
operating leases in footnotes of financial statements. 
The reasoning for the change brought by AASB 16 was that 
when operating leases were reported in footnotes, corporate 
financial statements could be misleading about the true nature 
of the liabilities of a company. AASB 16 closes the loopholes in 
AASB 117 by requiring that all operating leases should now be 
accounted for as finance leases.
What To Know About AASB 16
For more information on AASB 16, visit our website at 
https://www.nakisa.com/
What To Know About AASB 16