IFRS 16 - Lease Accounting

Hello,

I'm currently focusing on our approach to implementing the IFRS 16 Lease accounting change in my local authority.

I am wondering if anyone has started any initial prep work yet to ensure they are one step ahead. I know CIPFA have recently delayed this code until 2020, but given the large amount of reviewing and data gathering I was wondering what approaches other local authorities are going to take?


Thanks
Mitchel
Parents
  • Hi, I have recently started to look into this in my local authority, its early days for me but I have started to read up information on changes in standard from various sites (my personal preference on leases were articles by PWC and Deloitte, they have stated example scenarios which I found better to understand)

    One of the main changes is the new standard removes the previous lease classifications of operating and finance leases for lessees and it requires that a right-of-use asset be recognised for all leases (there are exemptions for short-term and low value leases), the standard requires councils as lessees to recognise assets and liabilities for all operating leases of more than a year on their balance sheet.

    In addition to reading I have started to liaise with the service departments to collect the lease data at this stage. I will be reviewing the operating leases (Council as lessee) to check which operating leases will now under new standard qualify as finance leases, key points to consider are term of lease, is it greater than 12 months? and the value (eg over £3000), if the answer is yes than this needs to be recognised as finance lease on the balance sheet.

    The accounting by lessors (Council as Lessor) remains unchanged with the exception of the classification of sub-leases and sale and leaseback arrangements.

    Hope this helps...  

    Rubia

Reply
  • Hi, I have recently started to look into this in my local authority, its early days for me but I have started to read up information on changes in standard from various sites (my personal preference on leases were articles by PWC and Deloitte, they have stated example scenarios which I found better to understand)

    One of the main changes is the new standard removes the previous lease classifications of operating and finance leases for lessees and it requires that a right-of-use asset be recognised for all leases (there are exemptions for short-term and low value leases), the standard requires councils as lessees to recognise assets and liabilities for all operating leases of more than a year on their balance sheet.

    In addition to reading I have started to liaise with the service departments to collect the lease data at this stage. I will be reviewing the operating leases (Council as lessee) to check which operating leases will now under new standard qualify as finance leases, key points to consider are term of lease, is it greater than 12 months? and the value (eg over £3000), if the answer is yes than this needs to be recognised as finance lease on the balance sheet.

    The accounting by lessors (Council as Lessor) remains unchanged with the exception of the classification of sub-leases and sale and leaseback arrangements.

    Hope this helps...  

    Rubia

Children