Document Text Contents
Page 1
© 2016 KPMG IFRG Limited, a UK company limited by guarantee and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
IFRS 16 Leases
A more transparent balance sheet
13 January 2016
kpmg.com/ifrs
Page 2
© 2016 KPMG IFRG Limited, a UK company limited by guarantee and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
“IFRS 16 will bring most leases on-balance
sheet from 2019. All companies that lease
assets for use in their business will see an
increase in reported assets and liabilities.
This will affect a wide variety of sectors, from
airlines that lease aircraft to retailers that lease
stores. The larger the lease portfolio, the
greater the impact on key reporting metrics.”
More transparent lease accounting
Kimber Bascom,
KPMG’s global IFRS
leasing standards leader
2
Page 12
© 2016 KPMG IFRG Limited, a UK company limited by guarantee and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Lease definition – Exemptions
Two major optional
exemptions make
the standard easier
to apply
Leases of low
value items
Short term
leases
≤ 12 months ≤ USD 5,000
for example
12
Page 13
© 2016 KPMG IFRG Limited, a UK company limited by guarantee and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Measuring the lease liability
Present value of
expected
payments at
end of lease
Present value of
lease rentals +=Lease liability
13
Page 24
© 2016 KPMG IFRG Limited, a UK company limited by guarantee and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Next steps
Read the new
standard
Think about your
implementation
plan
Watch out for our
detailed analysis
at kpmg.com/ifrs
24
Page 25
© 2016 KPMG IFRG Limited, a UK company limited by guarantee and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
© 2016 KPMG IFRG Limited, a UK company limited by guarantee and a member firm of the KPMG
network of independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved.
The KPMG name and logo are registered trademarks or trademarks of KPMG International.
The information contained herein is of a general nature and is not intended to address the
circumstances of any particular individual or entity. Although we endeavour to provide accurate
and timely information, there can be no guarantee that such information is accurate as of the date
it is received or that it will continue to be accurate in the future. No one should act on such
information without appropriate professional advice after a thorough examination of the
particular situation.
kpmg.com/appkpmg.com/socialmedia
© 2016 KPMG IFRG Limited, a UK company limited by guarantee and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
IFRS 16 Leases
A more transparent balance sheet
13 January 2016
kpmg.com/ifrs
Page 2
© 2016 KPMG IFRG Limited, a UK company limited by guarantee and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
“IFRS 16 will bring most leases on-balance
sheet from 2019. All companies that lease
assets for use in their business will see an
increase in reported assets and liabilities.
This will affect a wide variety of sectors, from
airlines that lease aircraft to retailers that lease
stores. The larger the lease portfolio, the
greater the impact on key reporting metrics.”
More transparent lease accounting
Kimber Bascom,
KPMG’s global IFRS
leasing standards leader
2
Page 12
© 2016 KPMG IFRG Limited, a UK company limited by guarantee and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Lease definition – Exemptions
Two major optional
exemptions make
the standard easier
to apply
Leases of low
value items
Short term
leases
≤ 12 months ≤ USD 5,000
for example
12
Page 13
© 2016 KPMG IFRG Limited, a UK company limited by guarantee and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Measuring the lease liability
Present value of
expected
payments at
end of lease
Present value of
lease rentals +=Lease liability
13
Page 24
© 2016 KPMG IFRG Limited, a UK company limited by guarantee and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Next steps
Read the new
standard
Think about your
implementation
plan
Watch out for our
detailed analysis
at kpmg.com/ifrs
24
Page 25
© 2016 KPMG IFRG Limited, a UK company limited by guarantee and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
© 2016 KPMG IFRG Limited, a UK company limited by guarantee and a member firm of the KPMG
network of independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved.
The KPMG name and logo are registered trademarks or trademarks of KPMG International.
The information contained herein is of a general nature and is not intended to address the
circumstances of any particular individual or entity. Although we endeavour to provide accurate
and timely information, there can be no guarantee that such information is accurate as of the date
it is received or that it will continue to be accurate in the future. No one should act on such
information without appropriate professional advice after a thorough examination of the
particular situation.
kpmg.com/appkpmg.com/socialmedia
