IASB Retrospective Method

IASB offers multiple methods for implementing IFRS 16 guidance. Organizations must apply the same full or modified retrospective approach to all leases.

The approaches are:

• Full Retrospective - Under the full retrospective approach, companies apply the new standard retrospectively in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimate and Errors.
• Modified Retrospective - You can choose on a lease-by-lease basis how to measure the ROU asset value:

  • Option 1 -- The program retrospectively calculates the legacy lease schedule as if IFRS 16 always applied, using an initial borrowing rate appropriate for the transition date.

  • Option 2 -- Based on Remaining Lease Liability

To specify the method that the Lease Classification Wizard should use, set the IFRS16_RetrospectiveApproach application parameter.