Impact of AASB 16: the new Leases standard | KPMG | AU

Impact of AASB 16: the new Leases standard

Impact of AASB 16: the new Leases standard

The new leases standard (AASB 16) will bring a number of changes and challenges beyond the financial reporting process.

AASB 16 will bring a number of changes and challenges beyond financial reporting.

Effective 2019, the new leases standard – AASB 16 (IFRS 16) – requires companies to bring the majority of operating leases on-balance sheet. Property and equipment leases previously recognised off-balance sheet will be accounted for as a right-of-use (ROU) asset and lease liability which will bring more transparency about a company’s lease commitments and change key financial metrics such as gearing ratios, asset turnover and EBITDA. Lessor accounting will be largely unchanged from the current leases standard, AASB 117 (IAS 17).

Implementation of the new leases standard is expected to pose financial and operational challenges beyond financial reporting. Not only will systems, processes and controls have to be modified to ensure complete and accurate capture of leasing data and judgments, but companies will have to assess and manage the impacts to, for example, debt covenants, credit ratings, leasing strategy, impairment testing and tax-effected accounting. Companies should not underestimate the effort, time and cost required to implement these changes.

We provide a range of services to help with your transition to AASB 16, including:

  • running or supporting your implementation project
  • accounting advice
  • transition impact assessment
  • transformation and IT system change solutions
  • KPMG Leasing Tool for IBM® TRIRIGA®
  • leasing strategy advice and valuation services.

Connect with us

IFRS 16 Leases standard

KPMG’s webinar held on 8 March 2016 covers core concepts of IFRS 16 Leases, and explores the key changes and implementation challenges.

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New leases standard – Introducing IFRS 16

Insight and analysis on the impact of IFRS 16 Leases.

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AASB 16 – Variable lease payments practical guide

Accounting for variable lease payments that depend on an index or a rate under AASB 16.

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Leases – Transition to AASB 16

This webinar examines the options and practical expedients for transitioning to AASB 16.

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Audit and Assurance

Independent audit services to enhance the reliability of information prepared by clients.

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Accounting Advisory Services

KPMG can assist with complex financial reporting, systems and accounting challenges.

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KPMG Leasing Tool for IBM® TRIRIGA®

KPMG Leasing Tool helps companies address the new ASC 842 and IFRS 16 lease accounting standards.

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IFRS 16 – Transition to the new leases standard

What’s the best option for your business on transition to IFRS 16?

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IFRS – Leases

KPMG’s insights into the new leasing standard, IFRS 16.

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New revenue standard – Introducing AASB 15

The new accounting standard AASB 15 will bring reporting changes for many organisations.

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