Accountants find themselves in a never-ending struggle to comply with the latest financial rules and regulations. From satisfying auditors with adherence to AASB 117 to the Australian Accounting Standards Board issuing AASB 16, a new set of regulations that will totally revolutionise the management of leases, in February 2016.
As with any regulation change, AASB 16 will bring about a lot of reading with an equal amount of headaches. Accounts departments around the country might want to bury their heads in the sand, but we have decided to meet the challenge head on! At the RAM blog, we’ve tried to provide answers for any questions you might have regarding AASB 16:
- Why? The Australian Accounting Standards Body announced AASB 16 in February 2016, to replace AASB 117. Many companies will have to update lease accounting procedures to become compliant by the 1st January 2019.
- What is changing? Under AASB 117, leases with similar financial circumstances to purchased assets were classed as “Finance Leases”, which led to them being reported on the balance sheet. Any other type of lease was classified as an “Operating Lease” and was not subject to the same reporting procedures. AASB 16 removes the classification of leases as being either “Operating” or “Finance”. All obligations will need to feature on the balance sheet, in the same way as Finance Leases do currently, under AASB 117.
- Does my company need to adapt to comply? If you currently have material Operating Leases, the answer will be, “Yes!” AASB 16 will completely change the reporting and management of these leases and their expenses. Most leases will need to find their way onto the balance sheet, with exceptions being those that are short-term (with lease terms of less than a year) and low-value (i.e. a leased personal computer).
- Can RAM help? Our solution is designed to transform each aspect of every day lease accounting. The system establishes complete control over all lease types and, through its integration with RAM’s fixed asset tool, allows for the reporting of leases on the balance sheet – crucial functionality in the journey towards AASB 16 compliance.
- Are there any other benefits to your solution? The list really is endless when it comes to benefits, so where do I start?! Our software is the difference between going through a stressful Year-End and delighting your auditors with the quality of information produced.
A few of these benefits include: assistance with AASB 16 compliance, detailed leasing information and a broad array of reports, including the Obligations Analysis report and the Fixed Asset Balance Sheet, enabling you to export any essential lease and asset information required!
RAM also has a dedicated technical support team that is available Monday to Friday 8am to 6pm. The solution features batch event functionality to save you vast amounts of time. To really make your auditors’ day, we also have a fully integrated asset tracking app to help your company keep asset location and status information up-to-date!
As a specialist solution provider, RAM has been preparing for AASB 16 since its announcement. We know how important compliance is and are dedicated to helping our clients achieve their objectives. Throughout its history, RAM’s software has been crucial to helping its customers adhere to regulations and we are now completely prepared to help you towards meeting all AASB 16 requirements.
If you would like further information about how Real Asset Management can assist with AASB 16 compliance, contact us today on +61 (02) 8915 5000 or email firstname.lastname@example.org.