Ten years in the making, the International Accounting Standards Board has issued a final standard (IFRS 16, Leases) that will require companies to bring leases onto the balance sheet. The new standard, effective Jan. 1, 2019, replaces the current guidance in IAS 17. IFRS 16 and the soon-to-be published guidance from the Financial Accounting Standards Board (FASB) under U.S. GAAP are not expected to be fully converged.

Primary effects: The rules will thrust about $2.5 trillion onto the balance sheets of listed companies using IFRS or U.S. GAAP. These companies will also show higher operating profits. Total cash flows would be unaffected, but you will see an increase in the amount of operating cash and a decrease of financing cash, according to the IASB.

Accompanying its new standard, the IASB has also published a separate effects analysis document. Last year, the IASB put out a similar document that also compares the IASB’s requirements to those of the FASB.

Video debrief: In a YouTube video, IASB chairman Hans Hoogervorst explains the new standard, which will “provide much-needed transparency on companies’ lease assets and liabilities, meaning that off balance sheet lease financing is no longer lurking in the shadows,” he says. “It will also improve comparability between companies that lease and those that borrow to buy.”