The Impact of IFRS 16 on Lease Accounting
IFRS 16 has presented companies with yet another layer of complexity to add to the myriad existing set of accounting rules and will undoubtedly have significant effects on balance sheets. For time-poor financial teams, IFRS 16 represents a big challenge for lease accounting management.
The LucaNet IFRS 16 App solves the complex nature of the new rules and re-gains the time for you that would otherwise have been lost to understanding and delivering reports to the new standard.
Intuitive Contract Entry with Transparent Audit Trail
Our IFRS 16 App provides you with an intuitive contract entry process in an easy-to-follow manner and also enables you to enter and ‘run the numbers’ on leases where the contract currency differs from the reporting entity’s functional currency.
All contract information such as contract number, lessee, or asset class is easily accessed and individual documents can be viewed or downloaded in a single click, making contract management a simple task, and enabling you to reconcile the information stored in the app with the information on the actual contract.
Flexible Lease Options Enable Easier Contract Management
Updating your lease contract’s base term, plus adding an option to terminate or purchase the contract couldn’t be easier. You can enter any number of alternative lease arrangements and extension options in a separate table then, when you decide to exercise the option, you simply check the ‘Exercise option’ box. The lease liability will then be automatically reassessed, and the lease term adjusted.
If exercising any of the lease options is considered likely, a second check-box enables the option to be taken into account in calculating the lease liability over time.
Easily Manage Contracts in a Foreign Currency
Using LucaNet’s comprehensive exchange rate tables, you can select the currency of your choice for any lease contract. Our App then runs the currency translation in accordance with IAS 21 rules and foreign exchange rate differences are recognised in the resulting profit and loss statement.
Record and Report Graduated Lease Payments for IFRS 16
If a contract includes graduated lease payments and the increases need to be accounted for from the commencement of the lease liability, the future lease payments can be recorded in a separate table. Both percentage increases and absolute amounts have their own tables available.
Convenient Breakdown of Liabilities for Disclosures
Simple liability management comes as standard. Our IFRS 16 App offers a breakdown of liabilities into short, medium, and long-term categories in-line with the detailed maturity analysis required under IFRS 7.
Talk to Us About the LucaNet IFRS 16 App
We’ll take you through a detailed exploration of the app and show you how it enables you to comply with IFRS 16 regulations without the hassle.
Contact Andy Carfax at our London offices on +44 20 3880 1740
leave us a message via the form at the foot of our Contact Us page and we’ll get straight back to you.