What is IFRS 16?

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:

  1. 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.
  2. 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
    •  term,
    • rental payable,
    • end-of-term options etc.

and then remove and show separately the payments which are not applicable to IFRS 16.

Battle of the Bulge

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)

BEFOREBEFORE

TODAYTODAY

National Day 48 Years 18.11.18

18.11.jpeg48 years of visionary leadership Happy Omani National Day
In 1970 we had 3 school and 10 km of road. Happy National Day Oman & Happy Birthday to an Amazing Leader that we (nationally & internationally) are privileged to know. An Icon of Peace & Prosperity. 
I had a so much written down, and then I realized it all comes down to this: we are blessed and fortunate to be raised in his era and era of #amazingleadership, may God keep him safe and in good health for us. #blessedtobeOmani#OmaniandProud and I can’t help being emotional about it, a simple and humble thank you for giving us all that you have. .
.
الدعاء إلى الله تعالى بأن يحفظ لنا مولانا صاحب الجلالة الرجل العظيم ، الوالد الغالي سلطان قلوبنا ، وأن يلبسه ثوب الصحة والعافية ويرزقه العمر المديد اللهم آمين يا رب العالمين.

Putting Myself Out There

Putting myself out there to show it can be done. Did you know that I had surgery on my wrist in the past where I lost 80% of my movement on my right arm, a long time ago and now calcification on my right shoulder, so I can’t really do very heavy weights or use too much of my body weight as pressure on that part of my body. However, I haven’t allowed that to hinder my workout. This wasn’t easy but I killed it, So Never Give Up 🥰. With Coach @s.velida_my awesome coach who takes all my injuries and still finds a way around it @azerwellness  

7 Day Break: But I Take An Oath

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

 

 

 

 

Face Scrub: Walnut

Made my own #mask #facial #skincare #weightloss #wellness

#walnut ground
1 tblspn #orange #zest
1/2 tspn #honey
1/4 tspn #coconutoil
Mix together apply as a mask and u can scrub it lightly or just wash it off

Really amazing 😉

orange zestwalnuthoneyCoconut-oil

Existing or Life

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

Current

Before

A Work in Progress – WIP

What was I thinking!! FYI – NO SURGERY

WhatsApp Image 2018-07-01 at 02.53.06
Before, not even at my Highest Weight!

WhatsApp Image 2018-06-19 at 15.08.00
A month ago

 

 

Intermittent Fasting – An Eating Pattern

So a while back the my Coach recommended that I try this diet that you have to fast in, i didn’t really listen and ignored it.

Just before Ramadan started I started following some really amazing people who did the whole fat to fit transformation (weight loss) with and without the gastric banding etc. So One of them mentioned it to me, this made me do some research and discovered that its called Intermittent Fasting.

What is Intermittent Fasting?

Intermittent fasting is a term for eating between periods of fasting and eating. (i hope this makes sense)

There is nothing about which foods you should eat, but actually when you should eat and that they have to be low calorie.

This is what worked for me and in 1 week they change was apparent even to those who saw me everyday.

Do I recommend it ? YES!!

Slide1.JPG

 I AM THE CHANGE 

The Diet Challenge for Fun

I am starting this tomorrow for one week:

Remember to stay HYDRATED, drink a lot of water

Slide1