The IFRS 16 standard
International Accounting Standards Board (IASB) announced IFRS 16 Lease Accounting standard and started a new era in how to handle the accounting of lease agreements. The standard is set to take effect on fiscal years starting on 1.1.2019 and after. According to new standard, practically all leases are to be shown on balance sheet (except if minor in value or duration), when in previous IAS 17 lessee had to divide lease contracts into financial (balance sheet) and operational (off balance sheet) leases.
The new IFRS 16 standard’s biggest impact is on balance sheet and on key figures derived from it. IFRS 16 also has effects on income statement as interest expenses and depreciation of the Right of Use assets must be shown. This means that compared to IAS 17, costs relative to leases are more front loaded during the time of the lease than previously. Also, EBIT and EBITDA will increase (with IFRS 16 standard) on companies which have lots of operational leases (by IAS17 definition).
The Tagetik IFRS 16 solution
CCH Tagetik IFRS 16 solution includes features like:
IFRS 16 calculation engine
CCH Tagetik solution creates a lease data mart for IFRS 16 and other reporting requirements. Using CCH Tagetik unified solution, you can calculate, report and reveal possible risks and minimize their impact on your business operations. CCH Tagetik integrates seamlessly with Microsoft BI and Qlik Sense solutions, so you can easily analyse and drill down to the lowest level of data. When you trust that the numbers are accurate, you can use more of your valuable time on analysis and planning, how to develop your business even further.
If your organization is searching for a lease accounting solution, CCH Tagetik IFRS 16 solution is for you.