When it comes to compliance, the earlier the better.
The first question the Central Bank will ask is which IFRS 16 has your Institution adopted for IFRS 16 compliance?
How do you answer the regulator without any worries for contradiction? Remember, the approach you adopt has financial and time implications. To decide the extend of the financial implications on your reported profits, you must first apply the standard NOW so that you know.
Which IFRS 16 implementation approach is good for you?
There are two approaches to adopt IFRS 16 Leases: Full Retrospective Approach and Modified Retrospective Approach.
Before you decide on which approach, you may need external independent expert approach, and obviously, NOT your auditors! Why, the auditor will come to audit you. And you don’t want them to take part in the process for which they will be giving an independent opinion! And that why Summit Consulting Ltd, is your preferred partner. We have invested a lot in helping clients comply with new and complex standards like IFRS 9, IFRS 16 and IFRS 17. We also provide IFRS update training to finance teams.
After we review your rental contracts and lease agreements, we recommend the ideal approach for IFRS 16. The fact is a full retrospective approach indicates governance maturity and a more pragmatic and consistent reporting which facilitates comparative analysis with the prior years for which the retrospective application is effective.
But this approach comes with lots of demand on finance staff time and could reduce your reported profits!
Modified Retrospective Approach is simpler and will ease your compliance and reduce overall cost of compliance. In case BOU asks for you the approach you are adopting, what do you tell them before you assess yourself? You don’t want to commit before you know the facts.
|Item||Fee (US $)|
|1||Review of all rental properties’ contracts and existing lease agreements, if any so as to effectively classify your leases for appropriate accounting treatment for your total compliance||0 – mandatory|
|2||IFRS 16 modelling and application to your Institution; including measurement and disclosures summary||Negotiable fee|
|3||IFRS 16 Training to select team (1-day training)||Negotiable (Optional)|
|4||IFRS 16 Template purchase to modify and use internally (the summitIFRS16 template is a MS Excel tool that makes your compliance swift)||Negotiable (Optional)|
|5||IFRS 16 on going compliance support – Your Institution has option to retain Summit Consulting for the first year effective contract signing date to deal with any BOU or central bank requests and requirements||1,000 monthly retainer (optional fee) helps train your finance team on the job by seeing how we response to BOU issues|
|6||IFRS 16 policies update – provide an update to you finance policies and procedures in respect to IFRS 16 compliance||Negotiable (Optional)|
|7||Board and top management briefing on impact of IFRS 16 on your bank – after analysis of the results.||Negotiable (Optional)|
For a discussion, contact us on [email protected] or Call Godfrey on +256775845691
To download a free IFRS 9 validation checklist, click here
To get a free IFRS 9 assessment, click here
To download a free IFRS 9 Model, click here
To request for in-company training in IFRS 9, IFRS 16, and IFRS 17 or any of these standards or other, call Godfrey.
Don’t worry about compliance. We have your back.