New Lease Accounting Standard Handbook
How to Comply with the IASB IFRS 16 Lease Accounting Changes While Also Driving Savings
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Get the IFRS 16 Handbook
Download Handbook to Learn:
- Summary of the new IASB IFRS 16 rules
- The Data and Documents You’ll Need to Collect
- Required Lease Accounting Software Changes
- Real World Accounting Examples
Overview of IFRS 16
The first effective dates for the new international lease accounting standard, IFRS 16, were in January 2019. The standard requires that all leases now be reported as finance leases unless the lease term is less than 12 months or the value of the lease is less than US$5000. The on-balance sheet requirement of the new standard is creating a huge implementation challenge for many companies. The challenge is exacerbated for companies with large equipment leasing portfolios because equipment leasing programs are typically decentralized, making it difficult to track down the data needed to comply with the new standards.
To comply with the new standard companies must:
- Learn the technical accounting and make policy judgements
- Collect lease accounting data and supporting documents
- Implement lease accounting and administration software
To maintain compliance, companies must:
- Develop policies and controls to ensure the company stays in compliance on day 2 of the new standards and beyond
- Establish automated processes to reduce unnecessary risks from manual workarounds, as well as costs
- Train all end users on the lease accounting and management software
To learn more about IFRS 16, the effects the standards will have on your business, how to staff and budget for the implementation project, and what to look for in lease accounting software, visit our lease accounting page.
