In 2019, IFRC introduced the long-awaited new standard on Lease Accounting. After all this time, bankers, analysts and investors had all got quite used to – and happy with – the standard adjustments we could make to come up with some ‘fit for purpose’ adjusted numbers. And then it all changed…..
This session looks at the accounting treatment for leases (lessors as well as lessees) under old IAS 17 and compares to the new IFRS 16. The options for transition presentation of prior year numbers means ‘standard’ adjustments are not all the same. Once IFRS is implemented, how different might a typical company’s financial position look? What is good and bad about this and how can we standardise? Implications for comps.
Having been applied from 1 January 2019, we can now analyse the impact of the new standard – what are the surprises and is it fair?
At the end of the session delegates will be able to:
- Compare the old IAS 17 and new IFRS 16 rules for accounting for leases
- Understand how the transition treatment impact the financial statements
- Compare and contrast key financial ratios and metrics under old and new rules
- Explain the impact of IFRS 16 compared to historic ‘internal’ adjustments
- Appreciate which different industry sectors are affected the most
- Take away a set of materials and Excel exercises based on rules and case studies
Who should join the session?
- Corporate finance advisory firms
- Fund managers
- Equity and credit analysts
- Banking associates in any client facing capacity
- Financial Risk
- Corporate treasury
- Finance teams
- Current IAS rules, a look at some performance and leverage ratios
- Operating vs Finance lease – the key differences (it’s still relevant for lessors!)
- Relevant accounting treatments for each lease type
- Scope and comparison under IFRS 16
- The transition alternatives to IFRS 16
- Case studies to pick out relevant numbers in accounts, compute, compare and contrast key ratios. Including
- operating lease adjustments to multiples
- how the numbers might look under new IFRS
Why IFRS might result in understated financial commitments
- Sector impact – what has the new standard done to leverage
- vs expectations
- vs self-adjusted prior year
- impact on analysis
- Relevant reading materials to take away for reference