IFRS 16 / ASC 842 Valuations
FINANCIAL & TAX SERVICES
As of January 2019, a new standard, IFRS 16, has come into effect. The objective of IFRS 16 and the corresponding ASC 842 is to define how companies must account for their leases and specify the rules for recognition, measurement, presentation and disclosure.
IFRS 16 eliminates the classification of leases as either operating leases or finance leases for a lessee and has a significant impact on companies that have relied on off-balance sheet financing in the form of operating leases.
Performing a professional and accurate assessment of the lease’s value requires knowledge in building a credit rating model, appropriate interest data and the ability to make the required adjustments. We advise you to consult with your accountant on whether the standard applies to you. For any further inquiries, we invite to contact our Head of PPA, IP and Economics, Daniel Guterman.