FAS 25/2018. Lease accounting is changing

Starting from the reporting for 2022, it will be necessary to apply the new FAS standard 25/2018 “Accounting for leases”.

This standard should be applied by all organizations that have entered into agreements related to the provision of property for temporary use.

Consider the main innovations:

• Under the new standard, the lessee must recognize the leased property as a right to use the asset;
• A lease liability (the amount of future lease payments over the entire term of the lease) should be recognized at the same time as the asset;
• Future liability payments must be discounted regardless of the lease term;
• And etc.

To switch to FAS 25/2018, it is necessary to make a decision on each contract separately.

Organizations are required to switch to accounting under the new standard starting with reporting for 2022, but you can start using the FAS right now. The main thing is to fix the decision in the accounting policy.

The Sterngoff Audit team is ready to assist you in developing accounting policies and making the necessary calculations in connection with the application of new standards. We will be happy to answer all your questions by e-mail info@sterngoff.com.