VW introduces IFRS 16 calculator
03 October 2018
Author: Sean Keywood
A free tool to help fleet managers comply with new accounting rules has been launched by Volkswagen Financial Services Fleet (VWFS Fleet).
It says under International Financial Reporting Standard 16 (IFRS 16) all material operating leases will need to be recorded on company balance sheets from 1 January 2019.
However, VWFS Fleet says that many managers are unsure what this means for them, and it has therefore designed a tool specifically for the car leasing industry. This tool will automatically calculate figures for IFRS 16.
Fleet manager need only enter vehicle details like registration, model, monthly rental costs, start and end of contract, any modifications and the revised rental costs.
The tool then calculates the lease as an asset with corresponding liabilities: it uses the present value of payments over the lease term against the right-of-use asset, and works out the depreciation and interest that can be added into the profit and loss columns.
These figures can then be recorded on the balance sheet and disclosed on financial accounts ready for end of year audits.
The calculator, available from the VWFS Fleet website, was developed by head of business performance Andrew Waller, a qualified chartered accountant, and his team.
Waller said: "In addition to the vehicles, finance and value added services that we provide to fleets across the country, we want to ensure we can support our customers and our prospects with useful advice and tools.
"Our IFRS 16 calculator not only supports the new accounting legislation, but will help them make the right decisions in managing their fleet and their business."