IFRS 16 ‘ Leases’ came into effect for all accounting periods beginning on or after 01 January 2019 and replaces IAS 17. The standard requires all leases to be included on the balance sheet unless certain exemptions apply. In order to assess the impact of IFRS 16, Companies must establish the present value of minimum lease payments of the lease and include the underlying asset and associated lease liability on the balance sheet. This is a huge change and big shake up for those adopting IFRS. To put things in context, it is expected to affect the amounts reported by almost half of listed companies.
At Pageline, we can develop spreadsheet models to support compliance of this new Standard. A model may help track and record information on leases within a business and automatically determine which lease should be included in the scope of IFRS 16.
A model could also determine the Present Value of minimum lease payments and fair value of an underlying asset relating to a lease (using an appropriate discount rate) to work out the impact to your business.
All future transactions will be calculated, making it simple to post to accounts including unwinding lease interest, making principal lease payments, and depreciation of fixed assets.
We can also develop spreadsheets to help with disclosures. For example, there is a requirement to reconcile previous operating lease disclosure notes to what is now included on the balance sheet under IFRS 16 and a spreadsheet model could automate this reconciliation for you.
In a nutshell, the model will do all the work, so you don’t have to.