Here are some steps you can take in preparation for IFRS 16
1. Make sure that you have a central register of leased assets and liabilities with a term of more than 12 months, unless the underlying asset is of low value (for example, the lease of a single personal computer).
2. Plan how you will record depreciation of leased assets separately from interest on lease liabilities in the Operating Statement.
3. Organizations that only have paper records of lease agreements must start to build electronic records so that data is available to the finance team and records are backed up with electronic copies of agreements for audit purposes.
4. Start planning how you will integrate your leased asset information with your fixed asset register. If your current fixed asset system does not offer a lease accounting capability, you’ll need to work out how you will manually adjust the depreciation calculations.
5. If an integrated fixed asset and lease accounting software package is your end goal, contact Real Asset Management for a free information pack at firstname.lastname@example.org