IFRS 16 - Leases
Implementing of new accounting standards
Deloitte’s Financial Reporting Advisory team assist clients to develop proactive yet measured approaches to help navigate the adoption of this complex new accounting standard.
IFRS 16 - Leases
The IASB has published its long awaited Leases Standard IFRS 16, effective for periods beginning on or after 1 January 2019.
This standard will result in many leased assets, previously held off balance sheet, being brought onto companies’ books, potentially adding billions in lease-intensive industries. Balance sheets, income statements and KPIs could all be fundamentally affected with challenging judgements, choices and system requirements lying in wait for many.
Phase One – Assessment & Advice
- Conducting a high level impact assessment;
- Assisting in lease data aggregation by surveying business units to identify and capture lease data and perform a preliminary impact analysis;
- Supporting assessment of whether systems and processes can capture relevant information and provide required reassessments with technical subject matter experience; and
- Providing advice and recommendations on accounting and tax evaluations.
Phase Two – Development & Implementation
- Developing the impact assessments into project plans and detailed implementation roadmaps;
- Performing a system-capabilities assessment and providing insights and observations on available information technology solutions, including vendor benchmarking;
- Providing insight and observations about project management; Helping coordinate IFRS considerations with other significant finance or information technology initiatives;
- Assisting with the design and implementation of process and control changes required as a result of adoption.
Implementation of IFRS 16
The implementation of IFRS 16 – Leases will have a significant effect on the financial statements of many entities with significant KPI’s such as ROCE and EBITDA likely to be affected. Included here is an overview of industry specific considerations in relation to the implementation of IFRS 16.