How do you account for IFRS16?

I am curious as to how other businesses have built IFRS16 into their reporting processes.

Didn't find your answer?

I currently work within the Finance Dept of a retail company. We lease a lot of properties for our stores, so our IFRS16 obligations are quite heavy. 

We currently operate an overlay system whereby the management and statutory accounts are calculated pre-IFRS16 and then I come in and overlay the IFRS16 numbers (i.e backing out rent and IAS17 adjustments, including ROU assets and lease liabilities). 

It's worked well for us up to now. But I want our reporting to be IFRS16 native. Meaning no overlay and importantly, not having to manually calculate our repayment timing adjustments. 

Any suggestions welcome!

(we currently use a combination of Microsoft Dynamics Navision for our accounts and use MRI's Horizon to overlay the numbers).

Replies (2)

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By SouthCoastAcc
11th Dec 2023 13:30

I don't know why you wouldn't only report under IFRS16? I don't think the process you have is normal.

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By paul.benny
11th Dec 2023 17:06

I've overlaid where group reporting is to IFRS and local reporting is under FRS102 (no idea why the difference - not a battle I wanted to open).

I would guess in your case, someone wanted to see a comparison at first and the overlay ended up being a hard-coded process. Or perhaps debt covenants still require numbers on the old basis.

There is no obvious reason for continuing the overlay, so I would plan to integrate into your books, maybe making the change from the next year end.

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