IFRS 16 compliance is a complex and resource-intensive task for finance departments, with challenges arising both from the complexity of the standard and from the practical problems of implementation. IFRS 16 requires detailed handling of leases, accurate calculations and extensive financial reporting. Automating IFRS 16 processes gives organisations better financial control and insight. Automating IFRS … Read more
The discount rate reflects the time value of money – the principle that money today is worth more than the same amount in the future, because of factors such as inflation, risk and alternative investment opportunities. IFRS 16 can be a demanding process for companies with many leases. When you set the discount rate under … Read more
The benefits of IFRS 16 goes beyond transparency and compliance. In this article, we will expand on the advantages that IFRS 16 software support can provide for organizations that have already implemented IFRS 16 and organizations that consider transitioning to IFRS standards in their financial reporting. Centralizing lease management under IFRS 16 brings a structured … Read more
What is a finance lease? A finance lease is a lease under which the lessee in practice obtains the economic benefits and risks of owning an asset, without owning it legally. The lessee obtains the right to use the asset over a major part of its economic life in exchange for periodic lease payments. At … Read more
IFRS 16 is an accounting standard introduced by the International Accounting Standards Board (IASB) and which came into force on 1. January 2019. It replaced the accounting standard IAS 17. But what is IFRS 16, and why does it exist? The accounting standard establishes principles for how companies should account for and report lease agreements … Read more
IFRS 16 was introduced by the International Accounting Standards Board (IASB) in 2019. The accounting standard has led to significant changes in the way companies must account for their leases. The biggest change is that the companies that report according to IFRS must now balance most leases, which means accounting for more variables than in … Read more
So far in 2023, seven companies have been listed on the Oslo Stock Exchange, the last of which was Norconsult. On Euronext, which is part of the Oslo Stock Exchange, 55 companies have been listed on the stock exchange. All these businesses are required to account for leasing and rental agreements in the accounts according … Read more
Do you still use Microsoft Excel or similar spreadsheets to manage your leases in accordance with IFRS 16? Do you still use Microsoft Excel or similar spreadsheets to manage your leases in accordance with IFRS 16? IFRS 16 solution vs Excel With a specialized IFRS 16 solution such as ShareControl IFRS 16, you don’t just … Read more
Calculating lease reassessments and modifications under IFRS 16 In an IFRS 16 calculation, it is important to distinguish between reassessments and modifications to account for changes correctly. Reassessments cover a change in the assessment of whether the lessee is reasonably certain to exercise (or not to exercise) an extension, termination or purchase option in the … Read more
Subleases Compared with IAS 17, IFRS 16 changes how an intermediate lessor assesses whether a sublease is a finance lease. IFRS 16 requires the sublease to be classified by reference to the right-of-use asset arising from the head lease, rather than by reference to the underlying asset (IFRS 16.B58(b)). The exception is a head lease … Read more
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