BDO Lease Accounting Services

Simplify complicated calculations

International Financial Reporting Standards (IFRS) 16 and U.S. Generally Accepted Accounting Principles (GAAP) Topic 842 have drastically changed how companies account for their leases.

IFRS 16―Leases and U.S. GAAP Topic 842 mandate that liability for most leases must now be carried on the balance sheet. The financial impact is determined by complex calculations for almost all leases—new right-of-use assets and liabilities that will be scrutinized by all from external auditors to independent board members.

IFRS 16 impacts key performance indicators, EBITDA to debt-to-equity ratio, profit before tax to net-current assets. It impacts bank covenants, shareholder agreements, earn-outs. It has a long list of impacts that are not obvious or that will be determined over time.

The most immediate impact is the administrative burden of the complicated calculations and required journal entries.

BDO lease accounting services makes IFRS 16 and U.S. GAAP Topic 842 simpler for controllers, VPs of finance, and CFOs. Our dedicated team can produce accurate journal entries using proprietary calculation software, BDO LEAD.

Private and public companies receive adjusted entries in real-time, rather than at each quarter or at year-end, allowing for timely and accurate reporting.

Finance teams can focus on the business, often at a fraction of the cost of having in-house IFRS and U.S. GAAP professionals.

BDO IFRS and U.S. GAAP experts will:

  • Train client staff on where to find the relevant information in each lease
  • Teach client staff how to use BDO Global Portal, a secure, cloud-based, document-sharing tool
  • Verify lease calculations, then provide monthly journal entries and a reconciliation of the balance sheet:
    • Calculating the interest expense for the period
    • Calculating the depreciation for the period
    • Calculating the right-of-use asset and lease liability at the end of the period

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Related Services

Our accounting-standards experts also offer additional services, from interest calculations to Advisory services that address the impacts on key performance indicators. Ask us about our integrated solutions.

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Additional Resources

Aditional Resources INFOGRAPHIC: Simplify complicated IFRS16 lease calculations View Infographic
Aditional Resources INFOGRAPHIC: IFRS 16: What It Is, Why It Matters and Why It’s Mandatory View Infographic

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