Lesson 7 of 8 · All lessons in this module
- What a lease is and how it is classifiedVideo lesson
- Lessee accounting: the IFRS model and US GAAP finance leasesVideo lesson
- US GAAP operating leases and the effect on ratiosVideo lesson
- Lessor accounting: finance versus operating leases
- Defined contribution and defined benefit pension plansVideo lesson
- Share-based compensation: stock grants, options and SARsVideo lesson
- Presentation and disclosure: leases, pensions and share-based pay
- Integrated cases: reading the pension, lease and share-based pay notes
Lesson 7 of 8 · 12 min
Presentation and disclosure: leases, pensions and share-based pay
The notes on leases, pensions and share-based pay are where an analyst finds the amounts, timing and uncertainty of future cash flows that the face of the statements only summarises.
In short
- Lease disclosure aims to show the amount, timing and uncertainty of lease cash flows. ROU assets and lease liabilities may appear as separate lines or inside 'other' assets and liabilities.
- IFRS 16 lessees: ROU carrying amount and depreciation by asset class, interest on lease liabilities, total lease cash outflow, ROU additions, and a maturity analysis of lease liabilities separate from other debt.
- Lessors: finance leases (selling profit or loss, finance income) and operating lease income; undiscounted maturity analysis for each of the first five years plus the rest.
- IAS 19: DC plans disclose only the expense; DB plans disclose characteristics and risks, a reconciliation of the net liability, sensitivity analysis, plan asset mix and expected cash flow effects.
- IFRS 2: terms of each share-based arrangement and a roll-forward of options (outstanding, granted, forfeited, exercised, expired, exercisable) with weighted average exercise prices.
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