16.13.1. Leasing management (IFRS16). Examples of Adjustment Procedures

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Procedure for Leasing Accounting from the Explanatory Note to Leanus

This procedure illustrates how to adjust the Management Income Statement and the Leanus Balance Sheet with the information on leasing contracts present in the Explanatory Notes to the financial statements. So the Leanus analysis will be more complete and will provide a representation that is more in line with the new accounting standards envisaged by the IFRS16 criterion.

We remind you that the adjustments made may generate variations, even significant ones, in the values ​​of: Balance Sheet Indices, L-Score, Z-Score, Cash Flow Statement, DSCR extension and so on.
To make the IFRS16 adjustments it is necessary to have the Explanatory Note relating to the accounting period (exercise) for which you want to perform the simulation. If you wish to make adjustments on more than one accounting period, the corresponding Supplementary Notes will be required.

Here is a real example with:

1. indication of which items should be found in the part of the Explanatory Note relating to financial leasing contracts (items in red boxes);
2. indication in which fields Adjustments in the Leanus management Income Statement and Balance Sheet formats these items must be entered.
   

Information on Financial Leases from the Explanatory Notes: in red the values ​​to use

Adjustments to the Balance Sheet - Leanus Sources and Lending Scheme

WARNING: Carry over the greater Net Equity, net of the Profit for the year, as shown in the example, to avoid adding it twice!

WARNING: The tables available in the Explanatory Notes to the financial statements may be different or less complete than the one used for this example. Therefore the indicated procedure may not always be applicable.

Adjustments to the Income Statement - Leanus Management Income Statement

WARNING: Remember to click on the button "Update" to make Leanus calculate the corrections entered in the fields!

Once the adjustments have been entered in the Income Statement and Balance Sheet formats shown above, Leanus will take this into account for the purposes of its own calculations. The inclusion of adjustments for Leasing it can also have a significant impact on company valuation and in particular in the following items:

• Net financial position
• Financial debt
• EBITDA, EBIT, Net income
• Equity shares
• Active
• All related indices (Eg. Pfn/ Ebitda)
  

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