You may have heard by now the way leases are accountant for will change as of 1st January 2019. For many business it is business as usual, however if you have a lease you may want to start thinking about the impact this has to your bottom line.
In effect operating leases will now have to be accounted on the balance sheet, meaning a greater impact to your profit and loss. Due to the new requirement to record operating leases, accounting softwares have been quick to respond with releases on how to handle these new complex rules. It is important to note, even though you will have higher accounting expenses at the start of the lease, this does not mean higher tax deductions. You should consult your accountant or send us a message if you have any questions.
As always though there are exception to the rule, with certain leases not having to be reported on the balance sheet; short term lease (<12mths), low value leases to name a few