The transition to the AASB 16/IFRS 16 standard proved a challenge for many Australasian businesses and made a lasting impact on key balance sheet metrics. On top of this, the current upward trend in market interest rates and inflation is providing further economic challenges for 2022.
Proactively and strategically managing your Incremental Borrowing Rate (IBR) is one way to deliver more beneficial reporting metrics for your organisation. However, IBR is the area where significant judgement is required. Therefore, a well-researched and structured application of an IBR strategy is critical to optimise key financial metrics, especially given this rapidly changing economic environment.
Deloitte and Quadrent have been monitoring the calculation, management, and application of IBRs closely since the adoption of AASB 16/IFRS 16 in January 2019 and recently published a joint report presenting some surprising findings.
In this webinar, we discussed these findings in greater depth and detailed how they could commercially impact your business and what proactive steps can be taken to enable you to optimise the levers at your disposal for balance sheet management and organisational decision making.
Key takeaways from this webinar were:
- When should an IBR strategy be reassessed?
- How important is IBR to lease accounting, compliance and strategic decision making?
- What impacts can an IBR have on financial performance and balance sheet metrics?
- Current market analysis of IBR calculation and management methodologies.
- What are my industry contemporaries doing for IBR?
- What are the key audit focus areas in terms of my IBR?
- What tools do I have at my disposal to calculate and analyse my IBR options?
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