www.pwc.comThe future of leaseaccounting
Lease accounting overhaul                                                                       2015?                     ...
Summary of the original proposals in the ED•   The original Proposals would eliminate operating lease           Balance sh...
Comment letter highlights and subsequentdevelopments• Almost 800 comment letters received globally     •   The boards iden...
Some reactions about the ED and impactsReactions• JP Morgan – “Bringing operating leases onto the  balance sheet and chang...
The new leasing model following redeliberationsThe boards have listened to constituent concerns and have tentatively agree...
The new leasing model following redeliberationsLessee Accounting Basic lessee model         No change     Right-of-use mod...
Impact of the original proposed model in the EDon annual expense                 2700                 2600                ...
The new leasing model following redeliberationsLessor AccountingLessor model           Significant     All lessors should ...
Business implications - the impact is far reaching                         Economic                         conditions    ...
Next steps•   Monitor developments•   Identify the key stakeholders and educate them on the new    guidance and timing of ...
Upcoming SlideShare
Loading in …5
×

Nya regler för redovisning av pensioner och leasingavtal får betydande effekt på företagens nyckeltal

665 views
602 views

Published on

Claes Janzon, PwC

Nya regler för redovisning av pensioner och leasingavtal får betydande effekt på företagens nyckeltal

IASB publicerar under första halvåret helt nya regler för bland annat pensioner och leasing som kommer att påverka de flesta företagens finansiella rapportering på ett väsentligt sätt. Leasingreglerna är hett omdebatterade och kritiserade och IASB har valt att backa på en del av de kritiserade förslagen, medan man föreslår helt nya ansatser på vissa områden. Många ändringar föreslås i förhållande till det utkast som publicerades så sent som i augusti 2010, men kvar står det grundläggande kravet på att alla leasingavtal ska redovisas i balansräkningen i form av tillgångar (avseende rätten att utnyttja objektet under leasingperioden) och en leasingskuld (avseende förpliktelsen att betala leasingavgifter).

När det gäller pensionsredovisning så kommer de nya reglerna att innebära stora förändringar för de flesta svenska företag då korridormetoden är vanligt förekommande i Sverige. Denna metod tas bort och istället uppställs ett krav på att omedelbart redovisa värdeförändringar på pensionsskuld och pensionsstiftelsers förmögenhet i övrigt totalresultat och balansräkning. Möjligheten att redovisa avkastning från förvaltningstillgångar begränsas också. De nya pensionsredovisningsreglerna kommer att träda i kraft från och med 1 januari 2013. Vidare diskuteras de nya förslagen kring redovisning av särskild löneskatt och avkastningsskatt som presenterats av Rådet för finansiell rapportering, och som föreslås träda ikraft 1 januari 2012.

www.financialreporting.se

Published in: Economy & Finance, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
665
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
0
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide
  • Notes for the speakeThe boards stated in the July meeting that the technical debate would conclude in September 2011. Our latest information suggests some topics (transition) are probably going to not be discussed until October 2011. If this is the case it could put pressure on the proposed timeline and mean the new Exposure draft may not be published until 2012.
  • 2005 – SEC study2006 – FASB/IASB agenda2009 – Discussion paper (300 comment letters)2010 – ED (~800 comment letters)
  • Nya regler för redovisning av pensioner och leasingavtal får betydande effekt på företagens nyckeltal

    1. 1. www.pwc.comThe future of leaseaccounting
    2. 2. Lease accounting overhaul 2015? Sometime Late 2011/ in 2012? early 2012 Jan 2011 Effective Dec 2010 Final date? Re- Standard? ExposureAug 2010 Re- deliberations Comment begin period ended Exposure In July, 2011 the IASB and FASB announced that they would re- Draft expose (target date is in the 4th quarter of 2011) likely extending issued the target date for completion of their joint project to sometime in 2012. 2
    3. 3. Summary of the original proposals in the ED• The original Proposals would eliminate operating lease Balance sheet accounting by lessees: Assets – Balance sheet grossed up with an asset and liability for all leases Liabilities – P&L – geography changes; expense recognition changes Income statement with front-loading and more volatility Rent expense• Lease term, contingent rents, residual value guarantees need Amortization to be estimated and re-measured Interest expense• Broad impacts on debt covenants, real estate and equipment financing strategy (lease vs. own), models for forecasting, EBIT impacts on incentive compensation plan metrics, etc. EBITDA• Additional processes, controls and systems EBITDAR• Maintain records to support estimates and periodic re- EPS measurements Cash flow statement• On transition existing leases are not “grandfathered” Cash from ops Cash from finance 3
    4. 4. Comment letter highlights and subsequentdevelopments• Almost 800 comment letters received globally • The boards identified five key areas for plus input from outreach such as workshops and discussion as follows: roundtables - Definition of a lease• Key concerns included: - Lessor accounting - Financial statement impact – e.g., - Lease term (i.e., extension option issues) volatility and front-loading of expense - Variable lease payments - Complex to apply and “operationalize” – e.g., frequent reassessments and - Profit and loss recognition pattern significant data needs • Boards also identified an additional list of issues - Highly subjective estimates and to address judgments • Boards commenced re-deliberations in - Time to implement February 2011 - Cost vs. benefit 4
    5. 5. Some reactions about the ED and impactsReactions• JP Morgan – “Bringing operating leases onto the balance sheet and changing the measurement basis of all leases has the potential to affect significantly the ratios and related quantities commonly used in investment decision making.” (October 2010)• PwC – “Lease accounting for retailers – the biggest ever accounting change?” (2010 publication title)• Credit Suisse – “$634 billion in future minimum lease payments due under operating leases by the companies in the S&P 500” (August 2010)• Standard & Poors – “Proposed lease-accounting requirements likely to affect our analysis” (November 2010)Impacts by industry• PwC assessed the impact of the leasing proposals on the financial statements and key financial ratios of a sample of approximately 3,000 listed companies across a range of industries worldwide. 5
    6. 6. The new leasing model following redeliberationsThe boards have listened to constituent concerns and have tentatively agreed tochange a number of key areas:Definition of a lease Basic definition No change A contract in which the right to use a specified asset is conveyed for a period of time, in exchange for consideration Distinguishing a service Significant Revise the current IFRIC 4 guidance to better from a lease change align the concepts in the leasing ED with those contained in other convergence standards such as revenue recognition. Proposed guidance clarifies that a specified asset can be a component of an asset, but that component must be a physical asset. Control is the ability to direct the use of, and receive substantially all the potential economic benefit from, the asset throughout the term of the arrangement. 6
    7. 7. The new leasing model following redeliberationsLessee Accounting Basic lessee model No change Right-of-use model Lease term Significant Contractual minimum term plus any change extension options where this is significant economic incentive to extend Variable lease payments Significant Only variable payments based on a rate or change index (such as CPI) to be included. Income statement No change Upfront expense recognition recognitionBoards are still deliberating if and when subsequent remeasurement would berequired. 7
    8. 8. Impact of the original proposed model in the EDon annual expense 2700 2600 2500 2400 2300Annual Expense 2200 2100 2000 1900 1800 1700 1600 1500 1 2 3 4 5 6 7 8 9 10 Proposed Model Current model Cash Rents The chart above depicts the impact on earnings for a basic 10 year lease with an initial annual rent of $2,000, a 2% annual escalation rate and an assumed incremental borrowing rate of 7%. 8
    9. 9. The new leasing model following redeliberationsLessor AccountingLessor model Significant All lessors should account for leases using a change ‘receivable and residual’ . Derecognise the underlying asset and replace it with a lease receivable and a residual asset. If profit on the right-of-use asset transferred to the lessee is reasonably assured, the lessor recognises that profit at lease commencement. The residual asset is measured on an allocatedBoards are still deliberating if and when subsequentbased on the proportion of be cost basis (that is, remeasurement would therequired. underlying asset’s fair value that is subject to the lease relative to the portion that is not). 9
    10. 10. Business implications - the impact is far reaching Economic conditions • Accounting/reporting • Treasury Operational Financing • Legal/regulatory issues Issues • Operations • Corporate real estate Leasing strategy change • Information/systems Effective Covenant issues management • Human resources of corporate real estate • Investor relations Budgetary • Taxes issues 10
    11. 11. Next steps• Monitor developments• Identify the key stakeholders and educate them on the new guidance and timing of changes• Identify and catalogue all existing leases and determine Perform what data gaps exist an Be inventory• Identify contracts affected (e.g., covenants, compensation Strategic of lease arrangements) portfolio• Estimate the financial statement impact of the transition, determine effect on debt covenants , credit rating agencies’ Build Be calculation of “debt-equivalents”, other operating metrics Internal Proactive and non-GAAP measures, Awareness• Analyze potential income and other tax considerations• Consider potential changes in leasing strategy• Summarize existing systems, control processes and gaps and determine what level of modification will be needed to account and report for leases under the new standard 11

    ×