IFRS 16: Advisory Services, Accounting Advice and Implementation has been added to your bookmarks.
IFRS 16: Advisory Services, Accounting Advice and Implementation
Time to Act Now
IFRS 16 Leases was adopted in January 2016 and is mandatory as of 1 January 2019.
This standard may have significant implications for you such as:
- It can materially change the balance sheet and the profit or loss statement.
- More information will be required than is currently available to many companies.
- Significant resources and improvements to existing IT systems may be required.
- Important decisions on a number of standard provisions will have to be made at an early stage.
- It will effect many internal functions, such as - accounting, financial, analytical, treasury (covenants), HR (compensation schemes).
- New opportunities to review the lease strategy will arise as well as a chance to review the approach to the lease business process management.
10 key questions companies should ask themselves:
- Do I know which agreements are lease agreements in accordance with IFRS 16?
- Can my IT systems and processes accumulate all the information on all lease agreements required for the application of IFRS 16?
- Can IT system provide information for the required ongoing assessment of lease agreements?
- Have you considered the applicability of exemptions and practical expedients?
- Have you chosen transition method to IFRS 16?
- Have you decided on which IT solutions to use to implement the IFRS 16?
- Have you decided which discount rates to use for various leases?
- Have you assessed the possible impact on the balance sheet and the profit or loss statement?
- How will you inform external users of financial statements about the expected changes?
- Have you considered the possibility of changing the lease strategy due to the adoption of IFRS 16?
Deloitte can assist you with the following:
- Identifying lease agreements in accordance with new requirements
- Assessing your readiness to transition from methodology, IT and resources perspective
- Assessing the completeness and quality of the information available
- Providing methodological support
- Assessing the impact of the standard on the financial statements
- Helping you to select best option for the transition to the new standard
- Developing accounting policies and settling down on the key judgements
- Calculating accounting adjustments (including retrospective adjustments, if needed)
- Preparing draft disclosures
- Assessing the existing business process including risks and controls, and leased property management
- Developing target business process models and roadmaps to achieve those
- Developing efficient controls for lease accounting
- Making necessary changes to the accounting systems
- Automating accounting adjustments calculations (in SAP, 1C, etc.)
- Developing turnkey IT solutions