Accounting treatments under International Financial Reporting Standard No. (16) lease contracts and their impact on income tax

Abstract

  The research aims to review the accounting treatments for financing lease contracts in the records of the leased company, which is the company beneficiary of the asset in accordance with the requirements of the application of International Financial Reporting Standard No. (16) lease contracts, and to present the statement of financial position and income in accordance with the requirements of this standard, and to indicate the impact of its application on the income tax due The company, and for the purpose of achieving the objectives of the research, the accounting treatments were clarified in accordance with International Financial Reporting Standard No. (16) lease contracts to display and disclose the items and accounts that were affected by these treatments, as well as the presentation of new accounts according to the requirements of this standard in the financial statements, in particular the two statements of financial position And income to know its impact on the income tax due before and after the application of this standard, and many conclusions have been reached, the most important of which is that most companies, before applying International Financial Reporting Standard No. (16) do not display items related to lease contracts in the statement of financial position, while we note that the requirements for applying This standard focuses on presenting separate items related to lease contracts in the statement of financial position within non-current assets (the right to use the asset) and includes The non-current obligations (the obligation of the lease of the asset) and this helps to assess the impact of lease contracts on the statement of financial position, and based on the conclusions of the research, the researchers recommend a set of recommendations, the most important of which is to urge private joint stock companies that have a large portfolio of lease contracts to work on studying the impact of the application of the financial reporting standard International No. (16) on income tax and the presentation of financial statements because of their great importance to stakeholders.