The new lease standard IFRS 16 that has now replaced IAS 17 came into force on 1 January 2019. The standard primarily introduces changes for the lessee; there is little change for the lessor.
For lessees, IFRS 16 effectively removes the terms financial and operational leasing from an accounting perspective and instead applies the principle of right-of-use assets. All lease liabilities must be recognised, regardless of the type of lease.
According to the simplified approach, it is possible to exempt leases that are low-value and short term, which according to the interpretation means leases that relate to assets with a value of less than EUR 5,000 and leases that have a remaining term of twelve months or less.
This standard is based on the view that the lessee has a right to use an asset for a specific period of time and at the same time an obligation to pay for this right.
The debt/equity ratio KPI changes when the liabilities in the balance sheet increase.
The classification in the income statement changes from being recognised as a leasing expense to being recognised as depreciation (of the asset) and interest expense (for the lease liability). This results in an improved operating profit but impaired net financial items.
In only a few quick clicks, Leasify’s service can provide you with a basis for your accounting.
All of the necessary information for IFRS 16 can be used in a smarter and significantly more modern and dynamic way—profitably and effectively.
Leasify’s service has been developed in collaboration with several of our 1,900 customers and through workshops with large auditing firms on the Swedish and global markets.
Would you like to know more about how Leasify can help you with IFRS 16? Book a demo or contact us below.
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All it takes is 15 minutes for us to show you how easily Leasify can help your company gain control over your IFRS 16 reports. Complete the form with your desired time, and we will reply with a meeting invitation. The meeting takes place online through Microsoft Teams or the video service you prefer.
Use our “booking” page if you want to set a time with us directly for a product demo. You can choose from the open timeslots on the page.
If you apply IFRS 16 in your accounting, the new rules mean that you need greater and clearer information about your contracts than before.
Through Leasify’s service, you simply choose your pre-set quarterly report and period, and a report is generated immediately. You can choose to download the report as a PDF or in Excel.
You receive a comprehensive and detailed IFRS 16 report that fulfils your obligations. Notes are illustrated, and the report contains comprehensive information about liabilities, opening and closing lease balances, deferred tax, etc. It is also easy to access each individual contract through Leasify.