How can I handle leases that need to be reported under both FASB ASC 842 and IFRS 16?

If a lease needs to be reported under both FASB ASC 842 and IFRS 16, it is recommended to enter the same lease twice if you encounter any of the following situations:

• ​Add a new Reporting Entity labeled with "IFRS" for easy tracking of leases to be reported under IFRS.

Initial Application Dates

Depending on the organization, different initial application dates (e.g., 1/1/19 for IFRS, 1/1/21 for FASB) could drive differences in calculations:

• ​Different discount rates
• ​Different existing balances under previous accounting guidance affecting initial ROU Asset value
• ​Different transition policy election (FASB/IFRS) could impact calculations. See Accounting Policy templates at Administration/Policies.

Operating Leases

A lease classified as operating under FASB ASC 842 would be a finance lease under IFRS 16, so these leases will need to be re-entered as Finance Leases.

Footnote

Selecting the IFRS 16 footnote excludes operating leases from the export.

Minimum Exemptions

IFRS has a $5,000 exemption limit.

Discount Rate

For nonpublic companies, the FASB allows for the risk-free rate election for the discount rate, whereas IFRS does not.

Lease Revisions

If a revised lease resulted in a change in classification under FASB from finance to operating lease, the revised lease would have to be entered as a finance lease to properly report under IFRS 16.

Index-Based Payments

Lease payments based on an index need to be recorded as a revision under IFRS and a variable expense under FASB, although this might be immaterial.