Does your company rent offices or land or equipment or anything else ?
If yes, then FRS 116: Leases is applicable to you for the upcoming December 31 or March 31 year ends.
What Does FRS 116 Change?
FRS 116 has fundamentally changed the way in which lessees would account for assets taken on lease. It requires all leases to be accounted for ‘on the balance sheet’ by recognising a Lease Liability and a corresponding a Right of Use (‘RoU’) asset, with an exception of certain short-term leases and leases of low value assets.
How It will Impact You?
• Lease liabilities with respect to future lease rentals shall increase financial liabilities
• Corresponding RoU asset shall also be recognised
• Lease expense, represented by depreciation and finance cost, instead of rental expense.
How Can We Help
We have developed an automated lease tool, to enable finance teams gear up for the transition of this big accounting change. Our tool will not only assist in the computation of the RoU asset and lease liabilities, but also generates information required for financial statements disclosures.
In addition our service also includes following:
• Review of lease contracts and other contracts which may be classified as leases and suggest suitable transition option
• Identifying changes from adoption of FRS 116
• Quantifying the impact using lease tool
What Should You Do?