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IFRS 16 Leases: Transition plan

Mining: IFRS 16: Transition plan

Transition plan

The impact and relative effort required to implement the new standard will vary depending on the transition option selected, but should not be underestimated. A key early decision is how to transition to the new standard. Some of the key tasks to include in your implementation plan include:

Current state assessment

  • Build a database of all existing leases and contracts that may contain a lease
  • Consider completeness of existing lease portfolio

Evaluation of contracts

  • Develop IFRS 16 assessment process for existing contracts
  • Consider engaging with key business stakeholders outside of the finance team

Transition options

  • Model the impact of transition options of financial metrics
  • Select transition option, considering the relative comparability and other benefits of avaliable options

Disclosure requirements

  • Disclose the impact of the new standard in financial reports prior to the date of initial application
  • Prepare for an increase in the disclosure burden for both lessees and lessors

Read the full KPMG in Mining: Practical Application Guidance report for more information.