Important Announcement - March 2020: In light of COVID-19 pressures, HM Treasury and the Financial Reporting Advisory Board (FRAB) have decided that the IFRS 16 implementation deadline of 1 April 2020 for the public sector will be deferred for a further year, to 2021/22.
CIPFA/LASAAC (Local Authority Scotland Accounting Advisory Committee) had already agreed to delay implementation of IFRS 16 leases in local authorities until 1 April 2020 however, in response to the ongoing coronavirus (COVID-19) emergency the public sector deadline for IFRS 16 will now be deferred until periods beginning on or after 1 April 2021 to ease the burden on practitioners as they respond to the current crisis.
Even as recently as 15th January, NHS Providers were providing an IFRS 16 impact assessment and the feedback on these was to be published in mid-February. On the 30th January, the World Health Organisation (“WHO”) declared a Public Health Emergency of International Concern.
Indeed, the impact assessment feedback was published on 25th February but just two weeks prior to this the World Health Organisation, announced “COVID-19” as the name of a new disease on 11 February 2020.
The next stage would have been a submission of the same IFRS 16 impact information as part of the operating financial plan submission, due on 5th March. But at the same time, the NHS and Government were being drawn to a worldwide health impact phenomenon and not an accounting one – a global pandemic was declared by WHO on 11th March and just 12 days later the country moved into lockdown.
Lockdown of course meant that only essential workers or those who could not work at home would travel to work. The government announced various and many measures that would set an agenda for the UK as a whole and the NHS in particular. IFRS 16 would be another casualty of the epidemic albeit an inanimate one.
Whilst we suspect the NHS Trusts and other public sector bodies had been on target to meet the 1st April 2020 deadline, it is worth all interested parties in the Public Sector taking advantage of this year long pause in implementation by reviewing and assessing just what aids and software are available to enable not just a smooth transition but one that positions each body to maximise the benefits that should accrue from having total knowledge and control over their leases.
Even though the public sector deadline has been deferred by a year, considering the complexity involved in transitioning to the new lease accounting standards, private sector bodies should still be looking for more efficient ways to manage their IFRS 16 obligations.
How Innervision Help Public Sector Bodies Simplify IFRS 16 Adoption
Innervision provides a unique combination of tools and expertise that change how you think about leasing and help you reach your critical compliance objectives and improved management.
Our advanced lease accounting solution, LLA, that has been developed with IFRS 16 and ASC 842 at its core. With the Innervision solution, it is easy to take control of your critical lease data and see your key insights in one centralised place. The platform is a hassle-free accounting solution that delivers all the transition tools and functionality needed to extract, validate and report on all the critical lease data required for full compliance and ongoing reporting.
The solution will perform all the required calculations for you and its in-built audit trail functionality provides the ability to track important lease modifications, elections and judgements, reflecting these in the disclosure outputs. Helping you maintain the accuracy, integrity and transparency of your financial accounts.
The solution provides an accurate, reliable and cost-effective solution to a complex issue.
For a brief introduction to the system watch our 2-Minute product overview below.
To discover how Innervision can help contact one of our lease accounting experts today, become a leader in the public sector and join the many organisations worldwide who have successfully transition to and achieved on-going compliance with IFRS 16.