{"id":8317,"date":"2022-06-16T13:48:42","date_gmt":"2022-06-16T13:48:42","guid":{"rendered":"https:\/\/sharecontrol.io\/uncategorized\/difficult-to-choose-ifrs-16-software\/"},"modified":"2024-04-18T11:30:50","modified_gmt":"2024-04-18T11:30:50","slug":"difficult-to-choose-ifrs-16-software","status":"publish","type":"post","link":"https:\/\/sharecontrol.io\/en\/ifrs-16-en\/difficult-to-choose-ifrs-16-software\/","title":{"rendered":"Difficult to choose IFRS 16 software?"},"content":{"rendered":"\n

Accounting for leases in accordance with IFRS 16 can be a complex task for companies that handle many leases with constant changes. In this article, you can read more about how IFRS 16 differs from previous accounting standards and what challenges and changes it entails for businesses. Furthermore, we want to show how an IFRS 16 software can help you with handling.<\/strong><\/p>\n

How to choose IFRS 16 software<\/h1>\n

Accounting for leases according to IFRS 16 can be a complicated task, especially if you handle this in Excel. In this article, we want to show why all businesses with more than lease agreements should purchase an IFRS 16 software equivalent to ShareControl IFRS 16<\/strong><\/a>.<\/p>\n

What is IFRS 16?<\/h2>\n

IFRS 16 is the new standard for accounting for leases that was published in January 2016. The goal of this standard is to make lease accounting more transparent and comparable across organizations. The new standard replaces IAS 17, which was released in 1993.<\/p>\n\n

Under IFRS 16, lessees will be required to recognize most leases on their balance sheet. This can be a complex process, something an IFRS 16 software can help with. These are systems that have been specially developed to help businesses with the IFRS 16 provisions, throughout the entire process from identification to balance sheet entry.<\/p>\n\n

Find out more about IFRS 16<\/strong>: What is IFRS 16?<\/a><\/p>\n\n

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What has changed under IFRS 16?<\/h3>\n

The main difference between IFRS 16 and IAS 17 is that lessees will now be required to recognize most leases on their balance sheet. This means that businesses must provide more information about their leasing agreements than under the old standard for accounting for lease agreements.<\/p>\n\n

Businesses must now provide more information about their leases, including the total amount of lease payments, the lease term and the interest rate. <\/p>\n\n

Good control of the lease agreements is therefore essential for handling the company’s accounts in accordance with IFRS 16. With the ShareControl IFRS 16 software<\/strong><\/a>, you can safely and efficiently manage all aspects of your leasing agreements, and ensure that your company meets the standard’s requirements in a flexible and reliable way.<\/p>\n

What is considered a lease under IFRS 16?<\/h4>\n

IFRS 16 defines a lease as an agreement that gives a lessee the right to use an identifiable asset (such as a building, machine, vehicle or other type of asset) for an agreed period of time against payment to the lessor. This agreement can be written, oral or implied, as long as it gives the lessee rights to use the asset. A lease can therefore be defined as an agreement between two parties, lessor and lessee, where the lessor agrees to give the lessee the right to use an asset for a specified period of time.<\/p>\n\n

For an agreement to qualify as a lease according to IFRS 16, it must meet the following criteria:<\/strong><\/p>\n\n

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  1. Identifiable asset<\/strong>: The agreement must identify a specific asset that the lessee has the right to use. This can be a physical asset, such as a car or office space, or an intangible asset, such as a license to use software.<\/li>\n\n\n\n
  2. Right to use<\/strong>: The lessee must have the right to use the identified asset for the specified time period. This means that the tenant has control over how and when the asset is used, even if the landlord still owns it.<\/li>\n\n\n\n
  3. Exclusive right to use<\/strong>: The lessee must have the exclusive right to use the asset for the specified time period. This means that the lessor cannot give other parties rights to use the same asset in the same period.<\/li>\n\n\n\n
  4. Lease term of at least 12 months<\/strong>: The lease must have an agreed lease term of at least 12 months or more, unless the asset is of low value (under $5,000) or the lease contains options to extend the lease term.<\/li>\n<\/ol>\n
    Typical lease agreements according to IFRS 16:<\/h5>\n