A little about me: I come from the world of finance so i have decided to add my professional writings in my blog as well.
IFRS 16 (International Financial Reporting Standard) is:
- a new standard for lease accounting which came into effect in January 2019
- Replacing the existing IAS 17 lease accounting standard
- It’s been put together by the International Accounting Standards Board (IASB).
Initially it seems slightly complicated – the part which could have been a nightmare, but when I took a closer look it is fairly straightforward to understand, but could be less so to implement.
So My colleague made it so easy for me and here I will try to make it easier for you to walk through the pros, cons and implications for your business accounting and who knows maybe even come up with a suggestion or two to make it simpler still.
What’s different under IFRS 16?
The changes apply to the way accounting is done for lease agreements that companies take out on property, plant and equipment (PPE).
Earlier this was divided into:
- finance leases and
- operating leases.
You see operating leases were not included in balance sheets as assets but were simply added to profit and loss accounts.
The prime IFRS 16 change is:
- Most leased items should to be included as an asset in the company books, following the new ‘right of use’ model which says:
‘A contract is, or contains, a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration’ (IFRS16, par.9)’
- The payments you make on the lease agreement have to be reported as a liability on your balance sheet.
- The accounting can be further complicated :
- as costs for maintenance,
- cleaning etc
have to be separated from the main lease payments, if they’re included in them, and reported separately.
- The depreciation of the asset and interest on the lease liability have to be shown on your profit and loss accounts.
- Asset shall be recognized under recognition criteria of IAS 16 Property i.e. depreciation or revaluation as consistent with its class of assets. The lease liability would be paid off over time using the actuarial method. Lease payments would reduce the lease liability when paid.
One pluses for IFRS 16 is that, if your company carries a number of lease agreements, it can be possible to combine them into a portfolio, instead of having to individually report them. This can only be done if you can show that there is no financial advantage for you in doing this.
Now the Exceptions to the rule
There are two specific types of lease which don’t come under IFRS 16 and which don’t have to be entered on the balance sheet as an asset:
- A lease with a shorter than 12-month term and which does not have an option to buy the leased item at the end of the lease.
- Underlying assets has a low value currently defined as less than US$5000.
Why the changes?
The change objective is so the companies all record the leased items as assets in the same way, making their existence more transparent financially.
In the past, some businesses could or would hold large liabilities on their operating leases but keep them off the balance sheets, giving a twisted view of their overall financial status.
How does IFRS 16 apply to my business?
The changes will only apply to:
- a PLC or a company that already reports to IFRS
IFRS 16 disadvantages
- Businesses leasing assets will appear from their balance sheets to be more asset-rich, but they will also appear to carry a bigger debt burden
- Will affect your key accounting and financial ratios. This may decrease the firm’s potential attractiveness to investors and its ability to raise finance.
- It might also lead to problems if you already have banking pledges in place which specify, that a exact level of profitability must be maintained for existing bank agreements to continue – it could affect funding
A simplified summary
The major changes to your financial reporting needed to comply with IFRS 16:
- The requirement to identify and show on your balance sheet the right to use an item as an asset and your commitment to make payments for it as a liability.
- The need to collect all the information on the leases
- rental payable,
- end-of-term options etc.
and then remove and show separately the payments which are not applicable to IFRS 16.
Hello my name is Amal Al Khaburi! I am 44 years old current weight 94 kg finally heading to a healthy weight. Which started 2 years ago, where I weighed 396 LBS/over 180++ kgs.
You see I have never been “the skinny girl” in fact I have spent my whole life overweight. I have been the butt of many jokes, and in general I have used food to comfort myself. I have been through many trials in my 44 years that haven’t helped my weight situation. In 2013 it all changed. I gave birth to my perfect little boy, Noah, weigh was 352 LBS/160 kg give or take. He came into my life exactly when I needed him, as I was going through so much in my personal life. 2017 was when it all clicked. I saw him developing the same eating habits I had. I fought too hard to have him, and here I was allowing him to develop in the same manner as myself.
It’s amazing isn’t it that we cannot see yourself even when you looking at yourself in the mirror every single day. I honestly do believe I was in denial, and ignoring all the signs, like cloths we not becoming any smaller, I could not walk much, needed help in wearing my cloths so many I can’t even remember.
In 2017, I was fearful that if something didn’t change, I wouldn’t be around to see all of my Noah’s milestones. They say hindsight is 20/20, but if I could go back and talk to my overweight self this is what I would say to her and all those who are fighting this battle. I would also tell myself to take all the energy I was putting into self-loathing and all the negativity about myself and invest in the time for myself, turning my self into a better version of me, since I am the one who matters!
“Stop wishing for a better figure, and start loving yourself first”
I spent so much time wishing I had the perfect figure and trying to be that perfect woman/girl that you hear about, but they don’t exist. You know the one I am talking about, the one:
- who never has had weight problems
- that girl who can wear that dress and not have lumps and bumps
- make the dress sway and flow too
and guess what I have come to discover that she doesn’t exist and that “perfect” girl has her own issues, sad but true, it is just that they aren’t as visible as being overweight.
I Embrace all the things that make me! I love myself so much even my Fab Mr. AS ❤️, asks me how can I love him and Noah so much, if I love myself so much first?
My reply is “if I didn’t love myself as I do now, then I would not be able to love them so much and always be grateful for all that I have. And that they would be miserable around me”
I don’t have a perfect life, I have my own struggles in raising our little boy and working on a beautiful marriage is not a walk in the park always, all relationships have their ups and downs. But I can promise you this, you will FLOURISH, as the conqueror of your own battle, only if you put all your energies into being the best version of yourself ❤️
The picture on the left was me at maybe 178++ kgs and the right was this evening.
The road to growth is entirely different for everyone but there are some common principles that affect us all.
Dont compare, it will rob you of hope
Once upon a time you made a choice. Only you can change your future
Where do you want to be tomorrow? Only you have the power to choose.
there are days I see myself in a group photo and think how in the hell after losing almost 88kgs am I STILL the biggest in the foto
Or when some, who think i should have lost more!!??
So my stomach is hanging and that area is still big. I am not hear to please anyone
Its slow but it’s steady.
Choose wisely .
Creating My Own Stepping Stones
the Battle of the bulge is not easy: we become moody, edgy, irritable, touchy and so much more. So its easy to give up and fall of the wagon. That is why a support group is necessary.
So I have been Lucky that I have my own little support group with me, its been a bumpy ride but we are getting there.
So when I started my weight loss journey and decided to join the GYM my mom laughed as did the immediate family who are close to me. You see I had done this so many times no one thought I would manage to pull it off.
Don’t get me wrong, they were tired of my joining the GYM and not going through and they all thought “ok another failed attempt” But this time what no one realized was that I have had blessings sent to me (everything happens for a reason)
We are growing #shrinkingarabsgrow “THE GOAL IS TO POSITIVELY IMPACT A HANDFUL IF NOT MORE PEOPLE MEN, WOMEN & CHILDREN THIS YEAR. TOGETHER, WE CAN BECOME THE BEST VERSIONS OF OURSELVES!” #FIGHTOBIESITY
DM @shrinkingarab IF YOU WANT TO BE PART OF THIS JOURNEY. 😍 #BETHECHANGE #AHEALTHIERYOU
#justdoit #weightloss #weightlossjourney #awareness #muscat #oman #wellness #fitness #healthylifestyle #healthyfood #cardio #workingout #fashion #beauty #fitmom #shrinkingarab #health #fattofit #fitnessjourney #fitfam
My weight loss has slowed down a lot, and that need for instant personal gratification tends to weigh heavily in my mind.
I catch myself wanting to find some cure all pill, or an extreme weight loss diet in order to shed an extreme amount of weight in a short time.
So I posted I was in the bottom of the pit, and I knew it was related to my love for food. I am very bravely taking a short 7 day break from DIETING not the GYM.
I take an OATH, where I promise to eat in moderation. I promise not to DIET, I promise to WORKOUT.
Having learnt the hard way, that to #BETHECHANGE , the mindset and lifestyle needs to change. What I need to learn is not to be over CRITICAL bout myself.
We learnt as children, that we needed superheroes in our lives, well I decided to become #MYOWNSUPERHERO
At 180kg I was just #exsiting last year I Chose to #LIVE for my #son #NOAH my #inspiration #bethechange #willpower #justdoit #healthylifestyle #workingout #cardio #weightloss #health #fighobesity #fitness #weightlosstransformation #life #muscat #Oman #fattofit #lessismore #anewme
What was I thinking!! FYI – NO SURGERY