In 2008, Sir David Tweedie, Former Chairman of the International Accounting Standards Board (IASB) said “One of my great ambitions before I die is to fly in an aircraft that is on an airline’s balance sheet.”

Now, whether he has taken that flight or not, we can’t confirm. However, Sir Tweedie can rest content in his retirement, knowing he lived to see the day that every plane, ship, oil rig, train, shop, hotel, and office leased by a company, can no longer be hidden on the balance sheet.

IFRS 16 – a new international lease accounting standard effective from January 2019- is the outcome of Tweedie’s tireless crusade which aims to lead the world’s accounting profession towards a more transparent and unified approach.

As monumental as the occasion was and is for Tweedie, the new operating leases accounting standard has caused major headaches for organisations forced to adopt and adapt.

Put simply, IFRS 16 treats all leases as ‘Right of Use Assets’- which requires recognition of assets and liabilities for all leases with a term of more than 12 months.

Affecting virtually all commonly used financial ratios and performance metrics such as gearing, current ratio, asset turnover, interest EBITDA, EBIT, and operating profit; achieving compliance requires companies to transform their business processes and collate significantly more data around their leases than ever before.

READ MORE: WHAT TO LOOK FOR IN A LEASE MANAGEMENT SOLUTION

 

lease accounting software

A SIMPLIFIED WAY TO MANAGE YOUR ACCOUNTING FOR LEASES

Under the new lease accounting standards of IFRS 16, organisations must adapt to new ways of working and are recommended to implement new processes to support:

  • one location for all lease agreements
  • monitoring of leases and and handling of modifications
  • consistent assessment and valuation of right of use assets
  • timely journals, payments and reports.

To solve the headache for CFO’s and Accountants and to ensure our clients achieve compliance, ASG created its own fully integrated Lease Management software solution for the enterprise.

The pre-built lease accounting software solution leverages Oracle’s Planning Cloud and is designed to enable not only compliance with the standard, but integration with other ERP systems to support better collaboration and decision making across the business.

 

With a focused team of experts responsible for timely, seamless delivery, our clients – like Sir Tweedie- rest easy knowing their IFRS 16 obligations are being met, and additional value such as cost savings and insights are achieved.

You can find out more about ASG’s Lease Accounting System here, or contact us today for a personal chat about your needs.

 

LATEST NEWS

NEWS

Rebooting Australia: Five principles to guide cost reduction in government

MEDIA RELEASE

ASG GROUP APPOINTS D’WAYNE MITCHELL AS VICTORIAN EGM

MEDIA RELEASE

ASG RESPONSE TO THE DEVELOPING CORONAVIRUS (COVID-19) SITUATION

Covid-19 ASG response