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Leasing IFRS16 vs US GAAP

Leasing IFRS16 vs US GAAP

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Doing a US GAAP tax pack.

Locally we account for leases with IFRS16.

I am told that I need to enter a US GAAP adjustment for IFRS16 - but does not know what it mean from a technical perspective.

IFRS 16 we have a transition adjustment giving us a further tax deduction each year of £10.000.

IFRS 16 in P&L is recognized a finance expense and depreciation of asset. 

Would anyone have any idea which adjustment I need to report US GAAP for leasing?


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By paul.benny
03rd Feb 2021 14:50

The group requirement makes no sense as expressed. I don't believe there are any GAAP differences in accounting for tax.

That said, I think what they are trying to do is treat all the leases brought onto the balance sheet by IFRS16 as operating leases, and so estimate the tax charge on that basis.

So you need to reverse out your depreciation on right-of-use assets and the notional interest, and replace with the lease rentals paid. Likewise the asset and liability come off the balance sheet.

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Replying to paul.benny:
By accountingdude
03rd Feb 2021 15:45

very good point indeed!

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By RaxJ
03rd Feb 2021 16:02

Do you not have a US GAAP reporting pack to follow? The FD should know...

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