IFRS 16, Leases: Implications for the shipping industry

The new lease accounting standard will fundamentally change the accounting for lease transactions and is likely to have significant business implications. Almost all leases will be recognised on the balance sheet, with a right of use asset and financial liability that recognise more expenses in profit or loss during the earlier life of a lease. This will have an associated impact on key accounting metrics, and clear communication will be required to explain to the impact of changes to stakeholders.