The new leasing standard becomes effective for fiscal years beginning on or after 1 January 2019 and requires all leases to be accounted for 'on balance sheet', a major departure from the requirements of FRS 17 in respect of operating leases.
To facilitate a smooth transition to this new standard, Grant Thornton’s Financial Reporting Advisory Services team led an interactive workshop for FRS 116 on 16 November 2018 for finance professionals to understand the new standard and discuss how it may impact your organisation.
FRS 116 may not only necessitate updates to existing financial accounting policies, procedures and systems, but also affect controls and contracts. Even if accounting policies are not affected, significant new disclosures and lease management activities are required that suggest the need for planning.
We believe that most companies will need to consider making changes in the following areas:
- accounting policies and disclosures
- application of judgment and estimation
- related internal controls that will require updating, if not overhauling, to reflect changes in accounting policies and processes
- systems to capture, process and maintain new lease data and for ongoing maintenance
- corporate and other taxes
- debt covenant compliance.
Read our presentation now to know more.