IFRS 16 IBM Planning Analytics

IFRS 16 IBM Planning Analytics – IFRS 16 compliance – are you ready?

Meet the IFRS 16 new leasing standards requirements by using Planning Analytics in combination with IBM’s IFRS 16 Solution Accelerator.   IFRS 16 is a set of lease accounting standards that, outside of the United States, will impact many businesses worldwide (US has a separate standard called GAAP). There are over 120 countries that currently adhere to the IFRS (International Financial Reporting Standard) accounting framework.  The new lease accounting rules require any business that takes out high-value leases – e.g. on equipment, on floor space, on vehicles – to add those leases (if the contract is for a year or more) to its balance sheet.

IFRS 16 IBM Planning Analytics – What is IFRS 16?

IFRS 16 IBM Planning Analytics – IFRS 16 is a set of lease accounting standards that, outside of the United States, will impact many businesses worldwide (US has a separate standard called GAAP). There are over 120 countries that currently adhere to the IFRS (International Financial Reporting Standard) accounting framework.

The new lease accounting rules require any business that takes out high-value leases – e.g. on equipment, on floor space, on vehicles – to add those leases (if the contract is for a year or more) to its balance sheet.  While this may sound straightforward, the implications are far-reaching and will require many organisations to rethink how they record lease information and how they calculate the costs of such leases.

The new IFRS 16 leasing standards will affect some types of industry more than others. In particular:

Retail / Telecommunications / Mining and metals / Banking / Oil and Gas / Construction and Engineering / Insurance.  Although the standard was formulated in 2016 , it will only become effective from January 2019. At that point, publicly traded companies will be required to add any leasing contracts that are over a year in duration to their balance sheet.

IFRS 16 IBM Planning Analytics – Are you ready to deal with the IFRS 16 standard?

  • You can educate yourself about the changes. Once you have a broad understanding of the requirements of the new regulations, you can plan new ways of gathering information in one place and applying the same calculations to all relevant lease holdings.
  • You should review your financial reporting tools and assess if they can handle the requirements of the IFRS 16 model. If you use only spreadsheets for lease information, it is highly unlikely that they will satisfy the new leasing requirements. (Spreadsheets can multiply quickly, which can lead to many different versions of leasing contracts). An alternative to consider would be a tool that gathers all the information required and then presents it in one secure place.

You can explore new solutions that make the IFRS 16 transition as pain free as possible. For instance, with IBM Planning Analytics you can get a IFRS 16 model within the tool that can satisfy the new leasing regulations.  Using the IFRS 16 Solution Accelerator in IBM Planning Analytics will help you:

  • Create Contracts
  • Run Calculations
  • Reporting and Analysis

Set up a Consultation with one of our IFRS 16 IBM Planning Analytics experts. 

IFRS 16 IBM Planning Analytics image
IFRS 16 IBM Planning Analytics image

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