Regulatory Alerts2017-06-17
Clarification on Changes in the Accounting Treatment for Lease Contracts (IFRS 16)
The Director General of Banking Supervision issued this circular to mandate local banks operating in the Kingdom to record lease contracts as liabilities and corresponding right-of-use assets in their financial statements under IFRS 16. The directive aligns with the January 1, 2019 effective date and early adoption option established by the IASB and FASB, while emphasizing the Basel Committee’s April 2017 FAQs available on the Bank for International Settlements website. Institutions must review these guidelines to ensure compliant accounting treatment and accurate balance sheet reporting.
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