IFRS 16 Lease Accounting Tool

For a smoother transition for your business

Implementing the new IFRS 16 lease accounting standard requires fundamentally changing the calculation methods applied within your business. The financial impact of the standard can be complex to quantify and involves detailed calculations and financial modelling, particularly for companies with large lease portfolios.

In order to assist our clients with the transition, one of the solutions that we’ve developed at PwC is a tailored and transparent tool that can be used to evaluate the transition day (‘Day 1’) impact as well as calculate ongoing monthly financial journals. Once customised and tested, it can be implemented in a matter of days, and doesn’t require complex IT infrastructure and therefore the onerous procurement which often accompanies such initiatives.

Introduction to the new standard

14/02/20

IFRS 16: Introduction

How does our tool work?

IFRS 16: How the tool works

Why is an IFRS 16 calculation tool required?

Data points

40+ data points are required for each lease to be managed and to calculate the IFRS 16 results.

Complex calculations

Complex calculations are necessary for leases with fluctuating periodic rent, ongoing changes in likelihood to exercise extensions or termination options, different lease or company reporting currencies...etc.

Managing lease data

Managing lease data and their calculations, and tracking post-transition lease modifications becomes complex when dealing with more than 25 leases.

Spreadsheet models

Basic spreadsheet models created for individual leases present a greater risk of input error, and require significantly more manual time and effort to aggregate balances, report consistently, and perform audits or verifications.

What is unique about our solution?

Implemented with ease

Once engaged, we usually deliver a tailored tool within 4 weeks, allowing for training and acceptance testing.

Total transparency and control

You have complete control and customisation opportunities. Our solution allows users to delve into the calculations if needed. You don’t have to fear the “black box” problem.

Complete compatibility

Excel-based outputs are easy to upload into your accounting system, and can be customised for efficiency of postings.

Comparative cost efficiency

System alternatives are orders of magnitude more expensive with less functionality, and usually require ongoing annual licence payments. Our solution will be provided to you with no ongoing licence payments.

Accurate, reliable and cost effective IFRS 16 accounting

Excel-based solution

Outputs IFRS 16 monthly journals

Supports all three transition methods

Tailored to fit your specific business needs

No associated annual licensing fees

In depth analysis of your lease portfolio

All-in-one single solution to hold your lease register and calculate financial impact

Supports multiple entities and currencies as well as group reporting conversion

Contact us

Richard Veysey

Partner, Accounting advisory, PwC United Kingdom

Tel: +44 (0)7718 976 960

Nigel Wilson

Deal Analytics Leader, Transaction Services, PwC United Kingdom

Tel: +44 (0)7715 484 979

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