Respondents to the latest 2020 Chartered Accountants IFRS survey shared their views on how the recently implemented financial reporting standards affected their businesses and functions, including preparing financial statements, data requirements, systems, processes and finance systems. The results included:
- 52% of the respondents indicated a moderate to a very significant impact of adopting IFRS 16 for the first time.
- 67% of users strongly agreed to somewhat agreed that recent major changes to IFRS 16 had improved the quality of the information.
First time adoption of IFRS 16 Leases impacted many entities globally by requiring recognition of nearly all leases on balance sheets reflecting their right-to-use an asset and the associated liability for payments.
The 2020 Chartered Accountants IFRS Survey launched in late 2020 brings together members views on the impacts of adopting new standards including IFRS 16 and whether organisations had the internal capability and resources to meet the new financial reporting requirements. The survey also covers IFRS 15 Revenue, IFRS 9 Financial Instruments and views on upcoming projects at the International Accounting Standards Board.
What the survey told us
1. Overall Impact
52% of respondents point to a moderate to very significant impact of adopting IFRS 16 Leases.
2. Key challenges
57% of respondents say that complexity in preparing financial statements was the greatest impact of transitioning to IFRS 16 Leases followed by IT systems and processes to collect lease data and perform bookkeeping (24%).
3. Impact of changes – capability and resources
51% of respondents used external support to help their organisation meet the requirements of IFRS 16.
The survey results help CA ANZ to engage effectively with, and advocate to, standard setters on behalf of members about new and upcoming projects. The current and upcoming projects relating to lease account are:
- The IFRS Foundation is offering webinars aimed at identifying how academics can contribute to the post-implementation reviews of IFRS16 Leases.
- Exposure Draft and comment letters: Lease Liability in a Sale and Leaseback. The IASB has proposed to amend IFRS 16 Leases by specifying how a company measures the lease liability in a sale and leaseback transaction.
- The International Public Sector Accounting Standards Board (IPSASB) has released for comment Exposure Draft (ED) 75, Leases and Request for Information, Concessionary Leases and Other Arrangements Similar to Leases. Stakeholder comments on ED 75 and Request for Information.
- How significant was the overall impact of transitioning to IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments?
- Respondents views on upcoming standard-setting projects.
- COVID-19 impact on financial reporting.