What is IFRS accounting?

rental accounting is a key part of any accounting system; Companies must ensure that these agreements are properly dealt with in order to avoid incorrect accounting. IFRS accounting has several significant differences from other national accounting standards used by companies. Within the lease accounting, the company must first find out whether the lease is capital or operate, the department of land and buildings and amortization of sales and lease. If the Company is involved in rent and must use IFRS accounting, there may be other requirements. Every situation may vary, so the company must look carefully at each individual lease. According to the current rules, the lease is considered to be the rental of capital if it meets one of the four conditions. Conditions are: Lease Life is 75 percent of life assets, transfer of ownership of assets at the end of the lease and there is a bargain price for the purchase of assets for rent or the current value of rental payments is more than 90 PROpent of the real market value of the asset. If the lease does not meet any of these conditions, the company must then classify the lease as a operation. The IFRS accounting rules differ for each of these classifications.

Another big difference between IFRS rental and other national accounting standards - such as the generally accepted accounting principles - is the land and buildings department. IFRS orders the department of these two items according to the current lease accounting rules. Again, the company must first find out whether the lease is capital or operation, and then create separate accounts for buildings and land involved in the rent. The result is two separate accounts that the company must review to take them correctly according to the IFRS accounting rules. Inability to correctly separate these items according to the lease accounting rules may result in sanctions from legal authorities.

dSales and leasing is another important difference between IFRS accounting rules and other national accounting standards. According to this agreement, the company sells an asset and then rents the item back from the buyer. Here, the lease contract usually has a classification as a financial or operating lease agreement, while the former transferring risks and remuneration to the tenant. If the lease is a financial leasing contract, IFRS lease rules determine the amortization of profits from the transaction of sale and rent. If it is an operating sale and rent, the company must immediately recognize.