IFRS-16

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

15 Dec 2021

Charitable giving

Supporting local community groups is a key part of our culture.  Our people spend many hours each year...

15 Dec 2021

12 days of Kiwiana Christmas

How to beat inflation while stuffing your stocking

14 Dec 2021

Office holiday closure dates

From our people to yours, a sincere thank you for the opportunity to do business with you in 2021. For...

09 Dec 2021

Forestry and carbon credits – new opportunities

Since residential property investment rules changed in early 2021, more and more landowners have been...

25 Nov 2021

Government support update

Wage SubsidyApplications for the seventh round of the wage subsidy will be closing at 11:59pm on 25 November...

22 Nov 2021

Further Auckland Business Support Available

On 22 October, the government announced a support package for Auckland businesses affected by the current...

18 Nov 2021

Risky business – how directors and officers can navigate today’s challenging operating environment

The Delta variant of COVID-19 has impacted New Zealand in ways we could not have imagined. Living with...

17 Nov 2021

Asheel Bharos

With a background in large accounting firms, multinational corporations, both overseas and in New Zealand,...

11 Nov 2021

Further COVID-19 support – make sure you claim your entitlement

Recent changes to the structure of government COVID support for businesses mean the dates on which applications...

04 Nov 2021

A fifty-year partnership that's still going strong

Celebrating one of Baker Tilly Staples Rodway’s longest – and most fruitful – partnerships

03 Nov 2021

Tax Talk | Minimum Financial Reporting for Trusts

In conjunction with the increase in the top personal tax rate to 39%, the government enacted new legislation...

03 Nov 2021

Tax Talk | Inland Revenue seeks information from rich Kiwis

What is Inland Revenue planning to do?

02 Nov 2021

The Great Resignation – Headache or Opportunity?

A social trend has emerged this year of people leaving their jobs by the masses.This article authored...

28 Oct 2021

Ongoing Government Support for Business - late October edition | COVID-19

As with all things COVID, the situation is fluid, and this newsletter outlines the position today. We...

22 Oct 2021

Vaccinations and the workplace

Things are changing quickly in the vaccination / workplace equation. Our HR teams provide this latest...

20 Oct 2021

Richard Williams - Director, Waikato

If you can’t find Richard in the office you will most likely need to widen your search. He’s probably...

20 Oct 2021

Six strategic tools every builder needs in their toolbox

There’s no denying these are unusual times to be in construction. Residential building consents are...

14 Oct 2021

Kylie Filbee-Cronin

Kylie Filbee-Cronin has been with the Baker Tilly Staples Rodway Taranaki team for all her working career...

08 Oct 2021

Ongoing Government Support for Business | COVID-19

Additional Resurgence Support Payment Available from 8 OctoberA third round of the resurgence support...

29 Sep 2021

Tax Talk | COVID-19 Business Support Update

Applications for the third round of the August 2021 wage subsidy will be closing at 11:59pm on Thursday...

29 Sep 2021

Tax Talk | Interest Deductibility Rules Announced

More than six months after the government announced interest deductibility limitations for residential...

21 Sep 2021

Tax Talk | New Tax Bill

The Minister of Revenue recently introduced the Taxation (Annual Rates for 2021-22, GST and Remedial...

20 Sep 2021

Getting to the pointy end of vaccination

Can employers make it mandatory for workers to be vaccinated? This is one of the difficult questions...

14 Sep 2021

Tax Talk | Business support update

With Auckland set to have another week at Level 4, and potentially several weeks at Level 3, the support...

Find an expert