The headline rule
At lease commencement, a lessee generally recognises a right-of-use asset and a lease liability. The old operating-versus-finance split mostly disappeared for lessees.
SFRS 116
Your office lease may belong on the balance sheet.
SFRS 116 is Singapore's lease accounting standard. For lessees, most leases create a right-of-use asset and lease liability at commencement, with exemptions for short-term and low-value leases.
What SMEs should review
Office leases, equipment leases, renewal options, purchase options, payment schedules, and discount rates can all affect the treatment. Short-term leases of 12 months or less and low-value assets may qualify for exemptions.
What the agent should do
The product should identify likely leases, draft the treatment, show the SFRS 116 basis, and route judgment-heavy lease terms to review before posting.
This is general accounting information for product context. Confirm lease treatment with a qualified accountant or adviser.
Stay close to the build.
Get early access