IFRS-16

If your entity is a Tier 1 or 2 For Profit entity and you haven’t already determined how NZ IFRS 16 Leases will impact on your entity’s financial statements now is the time to do so.

The adoption of NZ IFRS 16 requires recognition of lease liabilities and ‘right-of-use’ assets for all leases for which entities are the lessee with exemptions available for short-term leases and leases of ‘low-value’ assets (considered to be those less than $USD5k).

The recognition and measurement requirements of NZ IFRS 16 are extensive and should not be underestimated. The good news is that we have set up a specific team to assist entities to transition to the new standard and meet the ongoing obligations in relation to lease reporting.

Specific services we provide include:

  • Training – we can help you understand and operationalise the key requirements of NZ IFRS 16 including:
    • Capturing the key lease information from each lease agreement
    • Assessing the lease term for each lease (i.e. considering the likelihood of lease extensions)
    • Explaining the key disclosure requirements and the practical expedients available
    • Outlining the different transition options.
  • Calculations – we can calculate the ‘right- of-use’ (ROU) asset, lease liability, interest and depreciation charges for each lease using our bespoke IFRS 16 calculator
  • Disclosures – we can prepare and/or review the financial statement disclosures required by NZ IFRS 16, including explaining the key movements between the operating lease commitments prior to transition and the opening lease liability
  • Incremental borrowing rate determination – determining the interest rate implicit in the lease or the appropriate incremental borrowing rate can be complex and can also have a significant impact on the corresponding lease liability, ROU asset and lease expenses. We can assist in determining the appropriate incremental borrowing rate to use. NZ IFRS 16 requires this to be assessed on a lease by lease basis although certain exemptions are available.
  • Impact assessments – we can advise you on the potential impact of ‘lease vs buy’ financing decisions and other considerations that now arise as a result of these new leases appearing on your balance sheet
  • Journal entries – everyone’s favourite! Unless you are an audit client, we can provide you with a summary of the journal entries you will need to enter into your accounting system
  • Ongoing compliance – as lease conditions change and you enter into new leases, we can provide you with updated ROU asset and lease liability calculations and the corresponding journal entries. NZ IFRS 16 differentiates lease changes between modifications and remeasurements with differing requirements for each. We can help you navigate what this means for your business. Many businesses have received rent abatements and lease concessions as a result of COVID-19 and we can assist in correctly accounting for these
  • Auditor liaison – we can engage with your auditors and handle any queries they may have
Services

News

25 Feb 2021

Construction industry future looking confident for 2021

Listening to business leaders over the past few months, the general outlook for 2021 is: despite the...

24 Feb 2021

Secret agents: choosing the right people and tools to meet new privacy obligations

Data has become the currency of modern business – and with that comes real obligations.

18 Feb 2021

Tax Talk | Government support payment available

With the government’s announcement that Level 2 restrictions will remain in force until Monday in Auckland,...

17 Feb 2021

Most important changes in the Trust Act in 70 years

The most significant changes to the Trusts Act in 70 years come into effect this year. This summary has...

15 Feb 2021

Tax Talk | Key upcoming tax items

With 2021 getting off to a roaring start, there are a number of tax issues which you may need to consider....

05 Feb 2021

Tax Talk | The new 39% tax rate

The Government has passed legislation to implement a new top personal tax rate of 39% applying on income over...

03 Feb 2021

New Directors in our Taranaki and Hawkes Bay Firms

We're delighted to confirm the appointment of two new Directors in our network of Member Firms. Andrea...

25 Jan 2021

New Year's Resolutions for your business

During the Christmas/New Year break many people take some time to reflect on the year that has been and...

22 Jan 2021

COVID-19 jabs: can employers force staff to be vaccinated?

With the first COVID-19 vaccine being rolled out and further vaccines not far behind, many businesses...

19 Jan 2021

New normal or back to normal? Why the remote working revolution isn't here yet.

The COVID-19 pandemic isn’t yet over, but already there’s a rush to analyse the impacts and results...

21 Dec 2020

Can domestic tourism save holiday towns?

Domestic tourism is seen as the poor cousin to international overseas arrivals, but with borders likely...

18 Dec 2020

Picking up in the 21st century!

You’d be forgiven for thinking this was an article on successful dating strategies in this tech age.

14 Dec 2020

The year that was: what 2020 meant for NZ businesses

Catastrophe? Or not so bad, really? For New Zealand businesses, the view of 2020 depends on which sector...

05 Dec 2020

Tax Talk | Inland Revenue crackdown on property speculators

In the last couple of weeks, Inland Revenue have sent out letters to taxpayers who may have sold properties...

03 Dec 2020

Tax Talk | New top tax rate

The Government has passed legislation to implement a new top personal tax rate of 39% applying on income...

01 Dec 2020

Privacy Act Changes 1 Dec

On 1 December, significant changes to the Privacy Act come into effect. Our Technical Specialist Nicola...

25 Nov 2020

Please, take a seat

As an organisation, Baker Tilly Staples Rodway Taranaki has a vision statement that forms our decision...

24 Nov 2020

Mastering difficult conversations

The art of having a difficult conversation is not something that necessarily fits within the Kiwi cu...

20 Nov 2020

Payroll fraud within entities

What is payroll fraud?In recent years there has been an unfortunate marked increase in payroll related...

13 Nov 2020

Government expands small loan scheme

The government has announced an expansion of the small business loan scheme (SBLS), a COVID-19 related...

10 Nov 2020

Getting Big Gear through a tight spot

The story of a COVID-19 prompted business transformation which has brought renewed confidence and a new...

04 Nov 2020

Fundraising – how to gain more sponsorships using marketing

In our previous articles we have established that now is the time to take stock and adapt to ways of...

29 Oct 2020

Know your why: moving beyond anti-money laundering compliance

For accountants and lawyers, being included in New Zealand’s anti-money laundering/countering financing...

23 Oct 2020

Tier 3 and 4 NFP standards – have your say

It is hard to believe it has been five years since the Tier 3 and 4 Not-For-Profit standards were introduced....

Find an expert