IFRS-16 Transition Model

Description
INTRODUCTION:


When building a financial model, rent cost is one major component in your financial projections.  With the introduction of IFRS-16, projected income statements have shown a different split in expenses between rent, depreciation and interest costs.  With the adaptation of the standard in financial statements, even retro-actively in many cases, it has become a requirement that financial models incorporate and apply IFRS-16 in all projections.  This module allows for a transition to use IFRS-16 in both accounting records and business planning on the corporate level. This will allow measurement of the impact of IFRS-16 implementation retroactively and going forward on a company’s financials.


MODEL SPECS:


TIMELINE: 
Monthly Periodicity for 180 months (15 years)
Annual Summary Output
Flexibility for financial year end


MODEL CAPACITY:
Model periodicity is monthly
Model timeline spans up to 15 years (180 months)
Up to 40 properties can be incorporated


MODEL CALCULATION TABLES:
Timeline Flags and applicable discount factors
Present Value calculations for each property
Right-of-use Assets calculation [for balance sheet]
Right-of-use Liability calculations [for balance sheet]
Split of Short-term vs Long-term ROU liabilities
Interest component calculation [for income statement]
Rent component calculation [for income statement]
Depreciation calculation [for income statement]
Consolidated Annual Summary


MODEL AUDIT CHECK:
Full amortization of ROU Assets/Liabilities over lifespan of the property.




CONDOLIDATED SUMMARY:
 - The total payments can be shown for the year for cash flow purposes.


 - This table will sum-up all income statement charges:
a) Interest
b) Depreciation


In addition, it will show the balances at year end for:   
a) ROU Asset
b) ROU – Liability with short vs long term balance split.


An analysis showing the impact of the transition to IFRS-16 on EBT and EBITDA is also show for each of the years in the model (historical and forecast) to allow for restatement of the financial statements on the historical front as well as allow for projections in the corporate business plan.