IFRS 16 Leases

Insights

IFRS 16 Leases

Deloitte’s unique proposition for property occupiers

IFRS 16 Leases was issued by the IASB in January 2016. Subject to EU endorsement, it will replace IASB 17 Leases for reporting periods beginning on or after 1 January 2019.

Property leases are likely to be one of the most significant areas of impact. Understanding the impact of IFRS 16 requires a joined‑up approach looking at both financial and leasing strategy.

Our Real Estate Advisory Services team will address every aspect of corporate real estate, including understanding the financial effects of IFRS 16 and shaping your property strategy in the new environment. Whilst our phased implementation plan includes consideration of lease strategy within ‘Mitigate and Strategise’, it is important to be aware of the implications for real estate strategy from the beginning.

IFRS industry insights: Property occupiers

Some of the many questions our Real Estate Advisory Services team can help businesses answer include:

  • Should assets be bought rather than leased?
  • Should services be procured in a way that does not meet the definition of a lease?
  • How should the business manage its property portfolio and negotiate its property leases (including lease terms, incentives and structures)?
  • Is your estates strategy up to date, and aligned to the needs of the business? Do you have metrics in place to demonstrate efficient use of accommodation?
  • How will you educate those responsible for leasing strategy in the implications of lease structures for corporate performance reporting?
  • What are the implications for international businesses?
Deloitte's solution for the upcoming lease accounting under IFRS 16

Our Estates Strategy Review offering also enables us to provide you with:

  • Critical insight into the company’s estates strategy and benchmarking with industry practice;
  • Identification of strategy gaps;
  • Review of alignment of own vs. lease strategy with core business objectives;
  • Assessment of efficiency and effectiveness of use of leased assets.

Besides, Deloitte is using state of the art technology to support clients with both impact analytics and lease data extraction. ‎Lease data extraction is fully automated in 11 languages based on artificial intelligence routines. For more information, please contact Karl Frank Meinzer.

Again, until 1 January 2019, there is enough time to implement – but none to spare.

For more information or a consultation on how IFRS 16 may affect your business, please do not hesitate to contact our IFRS experts.

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