Tax for IFRS 16 lessees

Tax changes in Finance Bill 2019 affect lessees accounting under IFRS 16 for periods of account starting on or after 1 January 2019. IFRS 16 brings operating leased assets onto the balance sheet of the lessee for the first time, and the resulting transitional adjustments must be spread for tax purposes over the average remaining life of the relevant leases. In other respects, it may be possible to follow the P&L entries for tax. However, it will still be necessary for IFRS lessees to use hypothetical GAAP to distinguish between operating and finance leases for certain tax purposes.