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December 2022

Financial Reporting Dossier

By Vinayak Pai V, Chartered Accountant
Reading Time 26 mins
A. KEY RECENT UPDATES

1. IASB – AMENDMENT TO IFRS 16 (SALE AND LEASEBACK TRANSACTIONS)

On 22nd September, 2022, the International Accounting Standards Board (IASB) issued Lease Liability in a Sale and Leaseback, amending IFRS 16, Leases. Extant IFRS 16 includes requirements on how to account for a sale and leaseback transaction at the date of the transaction but does not delve into specific subsequent measurement requirements. Consequently, when payments include variable lease payments in such a transaction, there is a risk that a modification or change in the leaseback term could result in the seller-lessee recognising a gain on the ROU retained even though no transaction or event would have occurred to give rise to that gain. The latest amendment explains how to account for a sale and leaseback after the transaction date. [https://www.ifrs.org/news-and-events/news/2022/09/iasb-issues-narrow-scope-amendments-to-requirements-for-sale-and-leaseback-transactions/]


2. UKEB – A HYBRID MODEL FOR SUBSEQUENT MEASUREMENT OF GOODWILL

On 29th September, 2022, the UK Endorsement Board (UKEB), which endorses new/amended IFRS standards for use by UK Companies, published a research report, Subsequent Measurement of  Goodwill: A Hybrid Model, as a part of its contribution to the ongoing international debate on Day 2 goodw
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