Transition from IAS 17 to IFRS 16
For the transition to the new standard, IFRS 16, lessees are permitted to choose either a full or a modified retrospective transition approach for leases existing at the date of transition.
• Transition based on full retrospective (FR): Under this approach, a company applies the standard retrospectively. This method recalculates the contract from its original start date and takes the new standard into account. As of the start of the 2019 financial year, the new standards need to be calculated. Contract lines based on the IAS 17 standard are leading until the start date of 2019. Lease contract lines based on IFRS 16 will take over as of 2019.
• Transition based on modified retrospective (MR): Under this approach, a company applies the new standard from the beginning of 2019. The contract line's history, based on the old IAS 17 standard, is retained. Contract lines based on this standard will end at the end of the 2018 financial year. Contract lines based on the new IFRS 16 standard start per 2019.
• Planon also supports the use of a combination of both approaches (MR&FR). This means that:
◦ The liability is calculated from the transition date (01-01-2019)
◦ The right of use asset is calculated based on the new standard from the start date of the contract line.
◦ The difference between the right of use on the transaction date is booked as Retained earnings.
 | In practice, these transition methods are also referred to as transition options 1, 2A and 2B: • 1 = full retrospective, FR • 2A = combination of both approaches, MR&FR • 2B = modified retrospective, MR |