Accounting Standards and Governance

ACCOUNTING
STANDARDS AND
GOVERNANCE

INTRODUCTION
 Identifying the reason behind the introduction of new
lease standard AASB 16.
 Evaluating the implications of the introduction of AASB
16
 Identifying the advantages and disadvantages of AASB
16
 Evaluating the impact of AASB on the financial
statements of Bluescope limited and Boral limited.
 Evaluating the regulatory requirement of Bluescope
limited and Boral limited concerning social and
environmental information.

REASON OF INTRODUCTION
OF AASB 16
 To address the criticism of previous lease standard that is
IAS 17.
 Assisting the users in making financial decision by
providing them relevant financial information about the
leasing activities (Aasb.gov.au 2019).
 Providing a suitable basis to investors in assessing the
financial performance.
 Providing incentives to entities to opt for short term lease.

IMPLICATIONS OF AASB 16
 Increasing the liabilities and assets on the balance sheet.
 Elimination of distinction of separately reporting the
financial and operating lease.
 Accurate and faithful representations of all the financial
statements.
 Impact on the earning profiles of entities in the absence
of straight line method under the new standard (Ey.com
2019).
 Conducting comprehensive evaluation of the leased
liabilities and assets.