KPMG PROVADA University 5 juni 2018

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1 IFRS 16 voor de vastgoedsector Ben u er klaar voor? KPMG PROVADA University 5 juni 2018

2 The concept of IFRS 16 2

3 IFRS 16 Impact on a lessee s financial statements Balance Sheet IAS 17 (Current Standard) IFRS 16 P&L IAS 17 (huidige standaard) IFRS 16 Financial Operating All s Financial Operating All s Leased Asset Revenue Lease Liability Cost of Goods Sold Operating commitments disclosure Other operating expenses EBITDA Cash Flow statement IAS 17 (Current Standard) IFRS 16 Depreciation Financial Operating All s Interest expense Operating activities Net Result before tax Investing activities Financing activities 3

4 Example Lease of a Building 5 year of a building as from 1 Jan 20X1 1,000,000 per annum due at 31 Dec No renewal no purchase option Discount rate: 7% Building useful life: 20 years Q How to account for the of the building in the 20X1 financial statements of the lessee under IFRS 16? 4

5 Example - Lease of a Building (2) 1 January 20X1 Debit Credit ROU asset Lease liability (present value of 5 x 7%) 31 December 20X1 Debit Credit Depreciation expense ( /5) ROU asset Interest expense ( * 7%) Total P&L expense Lease liability Cash

6 IFRS 16 impact on lessors Same as IAS 17 Different to IAS 17 Lease classification test Finance model Operating model Definition of a Sale-and-back guidance Sub- guidance Accounting for modifications Disclosure requirements No symmetry between lessee and lessor accounting! 6

7 Key impact areas for real estate Buy vs. Lease? Spaces concept Real Estate as a service? Lease modifications Non- components Cost to obtain a Sale and Lease-back Renegotiations of existing contracts Sub-leasing IAS 40 standard on Investment Property 7

8 Other considerations Do you have insights which clients are IFRS and/or US GAAP reporters? Can you facilitate your clients with data collection (including the rate implicit in the )? Will contracts be structured differently going forward? Will clients consider alternatives to leasing? 8

9 More information? KPMG IFRS app A digital pocket size summary of KPMG's insights into IFRS Decision trees that help applying IFRS in specific situations A digital glossary into common IFRS terminology KPMG s IFRS 16 publications Visit our website: Contact us via IFRS16@kpmg.nl In-depth publications are available A smart search functionality Links to current hot topics in accounting such as IFRS 16 Push notifications when there is an update about IFRS 9

10 Thank you Niels Ebbinkhuijsen Capital Markets & Accounting Advisory Services Director, Amstelveen KPMG the Netherlands Tel: Mob: Ebbinkhuijsen.Niels@kpmg.nl

11 KPMG on social media KPMG app 2018 KPMG Advisory N.V., ingeschreven bij het handelsregister in Nederland onder nummer , is lid van het KPMG-netwerk van zelfstandige ondernemingen die verbonden zijn aan KPMG International Cooperative ( KPMG International ), een Zwitserse entiteit. Alle rechten voorbehouden. De naam KPMG en het logo zijn geregistreerde merken van KPMG International.