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The shipping business in Taiwan have used operating lease to acquire fixed asset for a long time. By the off-balance-sheet effects of operating lease, Leasee’s business could improve financial and operating performance. However, as the implementation of IFRS 16 in 2019, all leases should be recognized as right-of-use asset and lease liability except for short term lease and lower value asset. The elimination of the off-balance-sheet effects of operating lease not only influence the financial performance of leasee but causing the risk about fair value of lease liabilities paid by foreign currency, because most equipment for shipping business in Taiwan was rent from foreign corporations. The fair value risk of lease liabilities may also make leasee’s balance sheet unmatched, and unstable exchange gains and losses in income statement. Therefore, the purpose of the study was to address the risk about lease liabilities for lease according to IFRS 16. First, according to fair value hedge methods in IFRS 9, discuses the use of forward currency contract, currency swap and options to deal with the fair value risk of lease liabilities. Second, according to cash flow hedge methods in IFRS 9, discuses how to use lease liabilities as hedge instrument to deal with the cash flow risk about forecast foreign currency revenue.
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