From January 1st 2019, International Financial Reporting Standards 16 (IFRS 16) will come into effect.
This means that all material operating leases will need to be recorded on the balance sheet. However many fleet managers remain unclear of what IFRS 16 means to the business and the additional accounting that can add to the stress of managing a fleet.
Volkswagen Financial Services Fleet (VWFS Fleet) has developed a free tool, specifically for the car lease industry, that will automatically calculate figures for IFRS 16. These figures can be correctly recorded on the balance sheet and disclosed on financial accounts ready for end of year audits.
The IFRS 16 VWFS Fleet calculator was developed by Andrew Waller, Head of Business Performance, who is a qualified chartered accountant, and his team.
Waller designed the IFRS 16 calculator as an easy to use tool, which requires simple inputs and does all the computations for the user automatically. All the fleet manager needs to do is list the vehicle details including registration, model, monthly rental costs, start and end of contract, any modifications on the vehicle and the revised rental costs.
The application calculates the lease as an asset with corresponding liabilities, using the present value of payments over the lease term against the right-of-use asset. It then works out the depreciation and interest that can be added into the profit and loss columns.
“Confused?... you don’t have to be,” says Andrew Waller, “Our free IFRS 16 Calculator will automatically work out the figures you need to add to your balance sheet - without you having to understand all the complexities of how leases are recognised.”
The IFRS 16 VWFS Fleet calculator is already helping fleet managers get to grips with the new regulation and has been downloaded by over 500 businesses. VWFS Fleet eBook, which helps explain the new accounting standard, has also been accessed at the same time.
Andrew Waller stressed: “In addition to the vehicles, finance and value added services that we provide to fleets across the country, we want to ensure we can support our customers and our prospects with useful advice and tools. Our IFRS 16 calculator not only supports the new accounting legislation, but will help them make the right decisions in managing their fleet and their business.”
Those wishing to benefit from VWFS Fleet’s free IFRS 16 calculator visit https://www.vwfsfleet.co.uk/ifrs16 and complete the online form.