Ask the Expert: Sub Leases

A Not-for-profit organisation provides services to remote communities in regional Australia.  In order to attract staff, they rent several houses (at market rates) for periods of 5-10 years from external parties.  Staff then rent these houses from the NFP organisation on a short term basis (normally 6 months at market rates). How is this dealt with under the new AASB 16?
David Holland, National Head of Technical Accounting looks at the impact of the new AASB 16 leases standards on businesses with sub leases.

New Accounting Requirements for Local Government

Several new accounting standards AASB 15, AASB 16 and AASB 1058 apply to Local Government from the 1st July 2019 to create new rules for the way local government recognises income and leases.

These changes will impact on the way contract services, grants, contributions, rates in advance and leases are accounted for and in some circumstances, require local governments to recognise the beneficial value of volunteer services.

Ask the Expert: Leases with cancellation clauses

An entity operates a soup kitchen from premises attached to a local church. They have a MOU with the church regarding the lease of the premises which states either party can cancel the agreement without cause or compensation with 1 year’s notice.

David Holland, National Head of Technical Accounting looks at the impact of the new AASB 16 leases standards on leases with cancellation clauses.

New Year Countdown for New Leasing Standards

What’s on your New Year’s resolution list? Do you want to achieve a better work/life balance? Perhaps strike-off an exotic travel destination on your bucket list? Maybe you intend to finally launch that genius business idea you’ve pondered for months? Or, how about getting your lease arrangements into shape to comply with the new financial reporting requirements under AASB 16?

Ask the Expert: AASB 16

How will the new leases standard impact companies that either don’t lodge accounts with ASIC or prepare special purpose accounts? The reports prepared are mainly for internal management purposes and to satisfy banking requirements (i.e. ensure banking covenants are met).

David Holland, National Head of Technical Accounting looks at the impact of the new AASB 16 leases standards on companies that don't lodge accounts or prepare special purpose accounts.

Ask the Expert: Lease payments linked to CPI and AASB 16

A business has a 30-year lease (starting at $1,000 per month) which increases at the end of every 3rd year based on the CPI (assume the CPI index started at 100 and was 102, 105 and 107 at the end of the 1st, 2nd and 3rd years).

David Holland, National Head of Technical Accounting looks at businesses with lease payments linked to CPI and AASB 16.

Ask the Expert: IFRS 16 Leases

A company have entered into a 10-year agreement with the owner of the carpark they operate to pay 10% of all revenue generated by the car park back to the owner (payments due at the end of each month).  In return the company is free to set the pricing for the car park, incurs all operating costs (including insuring for public liability) and bears the credit risk for collecting parking fees (i.e. no agency relationship exists).

David Holland, National Head of Technical Accounting looks at the impact of the AASB/IFRS 16 leases standards on car park operation transactions.

Are you ready for the new lease standard?

As new accounting standards come into force over the next two years, property companies need to understand the implications for their businesses, says Moore Stephens’ director Ross Sicuro.

From 1 January 2019, a new Australian Accounting Standards Board standard will start to influence leasing decisions.