Motor Industry Services Alert | KPMG | AU

Motor Industry Services Alert

Motor Industry Services Alert

Keep up-to-date with monthly insights and best practice information for the automotive industry.

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The Motor Industry Services team aim to help dealer principals and general managers to uncover opportunities to achieve best practice in their dealerships. Our monthly alerts share knowledge and discuss current issues and changes within the motor services sector.

Current edition – December 2017

AASB 16 impact on Dealer groups

In the December edition we outline the impact on new property leasing standards on dealership profit before tax. Sweeping changes in the accounting for operating leases under AASB 16, which is effective for 2020 year-end financial statements, will begin to have an impact for dealer groups from 1 January 2018 as the disclosure requires the comparatives to be restated.

Key insights include:

  • Significant impacts on the P&L of dealer groups due to the phasing of the expense recognition (negative impacts for profit before tax) and the location of the expense in the P&L (positive impacts for EBITDA).
  • The typical operating leases that exist in dealer groups and why all dealer groups will be impacted by AASB 16.
  • Non-financial statement related impacts for dealer groups which include significant time in to comply with AASB 16 and impacts to your relationship with your finance provider.
  • What dealer groups need to be considering now and what actions need to be taken.
 

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