Define which leases are to be capitalized on the lessee’s balance sheet under IFRS 16.  Explain how this is different from the criteria that were previously used in U.S. GAAP (see Wiley 2ed Chapter 21 and ASC 840).  Also, explain which industries are most likely affected by this change and why. Explain why you think that the FASB voted to defer the effective date of the proposed ASC 842. In lease accounting, the FASB and IASB define a lease relative to a contractual “right of use” (ROU) of an asset.  Define ROU.  Is this ROU model consistent with the IASB and/or FASB Conceptual frameworks? Explain your answers in one or two paragraph(s).

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Under IFRS 16 and US GAAP a lease must be capitalized on the lessees balance sheet if it transfers substantially all of the risks and rewards incident... View the full answer