Most companies we are working with have made the decision to take the initial recognition exemption under IAS 12 and not recognise any deferred tax on their transition to IFRS 16.
In July 2019, the IASB published an exposure draft that proposed to narrow the scope of the initial recognition exemption, which will result in companies now having to initially recognise equal amounts of deferred tax on both the right of use asset and lease liability.
For companies who have already published financial results including IFRS 16 numbers, the proposed changes will result in a change in accounting policy and a restatement of comparatives.
We’re working with a range of clients on integrating IFRS 16 into their business as usual programme and running a series of workshops for our clients as part of sharing knowledge.
If you’d like to be part of the conversation and join one of our FR Intelligence workshops, please contact me and I’ll get you involved.