With AASB16, even though you recognise a liability at the start of the lease you should also recognise and asset so the two net off with each other ie no net effect. Of course if you don’t believe the future remaining value of the lease is an asset ie surplus space you no longer use then the accountants write off the asset value at that point and are left with just the liability ie the future committed lease payments.
What AASb16 does is gives a fairer picture of future lease payments, after all in companies like Myer they have very large commitments.
It is my understanding with VRS there is no effect on the profit numbers by the application of this standard nor Any net effect on the balance sheet ie assets will have increased and so will have liabilities.
VRS Price at posting:
5.4¢ Sentiment: None Disclosure: Not Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)