The IFRS 16 Standard requires all leasing contracts to be recognised on the balance sheet of the lessee (tenant): of all rental contracts: real estate (offices, shops), transport equipment (planes, lorries, boats, cars, etc.), industrial machinery and equipment, IT, etc. It will apply to fiscal years beginning on or after the 1st January 2019, subject to adoption by the Union European 1.
This is a big challenge for those who have large leased networks (trade and distribution networks, hotels, transporters, etc.) because it will increase the visible debt of companies and thus adversely affect the financial indicators usually used.
Until now, rentals were recorded as an expense in the income statement but did not appear on the balance sheet which could lead companies to resort to leasing, for accounting optimisation reasons so as not to increase their debt. Objective: that companies make choices based on the real value of the contract rather than driven by the logic of optimised presentation of accounts.