For most large private and public enterprises, adopting the new AASB 16/IFRS 16 lease accounting standards is proving a real challenge.
Not only can transitioning from operating leases to finance leases have a significant impact on the financial reporting numbers but complying with the new standards alone can mean a great amount of work internally.
However, before considering the numbers and the amount of additional work required the single greatest challenge being faced by the majority of these businesses is accessing the increased level of data required to even perform the reporting calculations.
For many multi-site tenants, given its very nature, real estate is also proving to be the area of greatest materiality and complexity. Where once a simple current rent would suffice, organisations now need to be constantly tracking a complete and accurate forecast of all future real estate lease commitments, including possible options. Typically not manageable via a spread sheet, businesses have commonly realised that they simply do not have easy access to the newly required source data, let alone an auditable system for storing and managing it, without utilising IFRS 16 software.
Being ready for AASB 16/IFRS 16 requires:
Without the right data or technology, compliant AASB 16/IFRS 16 reporting is not possible!
LECompliance is an optional plug-in module for our all-in-one, cloud-based lease management software that has been exclusively developed for those customers needing to manage the compliance reporting requirements under the new AASB 16/IFRS 16 lease accounting standards
LECompliance can be made available for Customers at any time. Utilising their existing lease and rental data and adding the ability to manage decisions on interest rates and the take-up of options. The module automates the calculation of required cash flows and balance sheet reporting for initial positions as well as for subsequent measurements in future periods.
The fundamental key in successfully adopting the new AASB 16/IFRS 16 lease accounting standards is ensuring the quality of lease portfolio data.
Both initially and at each and every future reporting period, without a complete and accurate set of lease data, a business’ ability to meet these compliance reporting requirements will be highly compromised.
However, for LeaseEagle customers, managing their data in the core system ensures that this standard is maintained as a matter of course between each period, enabling prompt and accurate reporting for AASB 16/IFRS 16.
We’ve worked with some of the biggest names in Australia to minimise the complexity of AASB 16/IFRS 16 compliance with our IFRS 16 software.
“As a public company with over 120 property leases in multiple countries, managing IFRS16 without LeaseEagle’s LECompliance module would be virtually impossible.
Their solution is both simple and powerful, and the support and expertise that we have received throughout has been first-class.”
David Speirs, CFO, Beacon Lighting (ASX: BLX)
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