Impact of New Lease Accounting Standard on Loan Agreements

By Rorisang Mzozoyana | June 9, 2020

Corporates often choose to lease long term assets instead of buying them for a number of reasons – there may be tax benefits to leasing the asset and not buying it and leases offer more flexibility in terms of adjusting for technology and capacity needs.

A recently published new IFRS lease standard may have an impact on loan agreements that terminate after 1 January 2019 which are entered into with borrowers which hold a number of leases of movable or immovable assets such as borrowers in the aviation, manufacturing, mining or retail sectors. Read more here.