Accounting standards - Leases FRS116 - Workshop SG 2020

Overview

FRS 116, ‘Leases’, replaces the current guidance in FRS 17.  Under FRS 116, lessees has to recognise a lease liability reflecting future lease payments and a ‘right-of-use asset’ for almost all lease contracts. This is a significant change compared to FRS 17 under which lessees were required to make a distinction between a finance lease (on balance sheet) and an operating lease (off balance sheet). FRS 116 contains an optional exemption for certain short-term leases and leases of low-value assets; however, this exemption can only be applied by lessees.  This new revenue standard will be required for reporting periods beginning on or after 1 January 2019.

Key Topics Covered:

Session 1

• Overview of FRS 116
  • What has changed from FRS 17
  • The changes to lessee accounting

Session 2

• Scope

– definition of a lease

• Recognition exemption
  • Exemption from lease accounting

Session 3

• Identifying a lease
  • Measurement of lease liability

– Components of lease liability

– Lease term

• Measurement of right of use asset

– Components of right of use asset

• Accounting entries
• Tax effect of temporary differences

Session 4

• Sale and leaseback transaction

– Interaction with FRS 115

• Sublease

– accounting requirements

Session 5

• Lessor accounting
• Finance and operating leases

Session 6

• Transition options

– Full retrospective

– Limited retrospective

• Disclosure requirements

Trainer Profile

Oh Ai Sim

Ms Oh has over 21 years of audit related experience with a big four accounting firm. Her portfolio of clients includes public listed entities and multinational corporations covering the following industries: retailing, manufacturing, trading, property development and construction. She also conducted in-house and client training covering FRS and audit related topics.

Objectives

• Gain an overview understanding of FRS 116
• Learn the changes to lessee accounting
• Understand tax effect of temporary differences
• Apply disclosure requirements

Audience

This workshop is suitable for Accountants, Financial Managers, Finance Controllers and anyone who is interested in the FRS 116 requirements and its application.