Implications of AASB 16 on Financial Position and Performance

This presentation provides an overview of the provisions of AASB 16 and analyzes the potential impacts on a company's financial position and performance. It also offers recommendations for effective application of the standards, including compliance and adherence to qualitative characteristics. The presentation references the Annual Report of Myer (2017) and works by Henderson et al. (2015) and Joubert et al. (2017).

Management
accounting
Task 2

Table of Contents
• Introduction
• Description of leases
• Potential impact on financial position
and performance
• Improvisation in financial reporting
through AASB 16
• Recommendations

Introduction
• Presentation summaries the provisions of
AASB 116
• Analysis of the potential impacts on the
company’s financial position and
performance is done by the application of
the new rules introduced in AASB 116.
• Recommendations will be provided to the
companies for the application of standards in
an effective manner.

A summary of the new rules
according to AASB 16/IFRS 16
• AASB 16 leases was published on
February in the year 2016 and will is
effective for initial period or after the 1
January 2019.
• For the lessees having operating leases,
a ROU will taken to the balance sheet
along with the lease
liability(Joubert,Garvie and Parle, 2017).

An analysis of the potential impacts on
the company’s financial position and
performance
• Non renewal of leases at Hornsby, Belconnen
and Colonnades
• A material impact on the consolidated financial
statement of company
• Resulting in recognition of the front-
loaded expenditure pattern for most of
the leases(Henderson and et.al, 2015).

Recommended actions
• Consideration of a cross-functional
approach
• Introduction of changes
• Compliance towards applicable
standards and provisions
• Adherence towards qualitative
characteristics

References
• Annual Report of Myer, 2017. [pdf]. Available from <
http://www.annualreports.com/HostedData/AnnualRepor
ts/PDF/ASX_MYR_2017.pdf>. [Accessed on 1 October
2018].
• Henderson, S., Peirson, G., Herbohn, K. and Howieson,
B., 2015. Issues in financial accounting. Pearson Higher
Education AU.
• Joubert, M., Garvie, L. and Parle, G., 2017. Implications
of the New Accounting Standard for Leases AASB 16
(IFRS 16) with the Inclusion of Operating Leases in the
Balance Sheet. Journal of New Business Ideas &
Trends, 15(2).

Thankyou