New Accounting Standards in Europe Bring Changes in 2019
For fleets in Europe, it is not uncommon for leased inventory to be excluded from the balance sheet. Beginning in 2019, however, that is going to change. The International Financial Reporting Standard (IFRS 16) will contain new changes to be put in place by January 2019. Companies will be required to disclose information for all leased assets on their balance sheet.
ARI’s Director of Lease Portfolio, Jesse Mann weighed in on the upcoming changes in an article published by Asset Finance International. Mann predicts there will be a significant shift to an open-end lease model in the next 10 years. For most fleets, an open-end lease offers a flexible solution that provides transparency and more options for controlling operating costs.
The open-end leasing model is popular in the United States and is poised to become more widely utilized in the UK as more companies reassess their leasing strategy. Open-end leasing provides a transparent approach to leasing that eliminates hidden fees and can reduce the total cost of ownership. For fleet managers looking to achieve cost savings, open-end leasing could provide them with the opportunity they have been searching for.