Provision of Research into IFRS16 Changes to the Treatment of Financial and Operational Leases

Tender description

At ONS we have been following the debate around operational and finance lease changes under IFRS16. The current business account recording for leases (e.g. under IAS17) is considered to be broadly consistent with the recording required in the National Accounts under European System of Accounts 2010 (ESA 2010). However, there will no longer be comparability with the business accounting standards and the statistical standards when the new IFRS 16 comes into effect in January 2019. This opens a risk that ONS surveys and administrative data will record many more financial leases, across the sectors of the UK economy, than currently. It also opens up possibilities of double counting of assets as a result of the asymmetry between the lessor and lessee treatment within IFRS16. We have noted therefore that research is required to estimate the likely size and scale of the issue for economic statistics and identify areas where quality adjustments will need to be made to the National Accounts to maintain consistency with the current definition. The research will need to consider impacts by both industry and economic sectors