Effective 1st January 2019, your bank is required to account for all leases under the requirement of the new International Financial Reporting Standards Sixteen (IFRS 16). The standard requires that your bank accounts for leased assets (Right-of-Use Assets) and Lease liability on the financial statements.
Bank of Uganda, the banking regulator under Instruction Circular EDS.306.2 dated 20th February 2019 requires all Supervised Financial Institutions to submit a return in respect to IFRS 16 by 31st July 2019. The closer the deadline, the higher the cost for Your bank. To comply, you must urgently review all her assets for IFRS 16 specifically classification and measurement. In addition, your bank must decide on the first adoption approach.
To avoid possible late submission penalties, and/ or increased regulatory oversight for poor responsiveness, Summit Consulting Ltd presents this proposal to support IFRS 16 Tool modelling to facilitate IFRS 16 compliance and swift reporting to Bank of Uganda as per requirements.
To register for the upcoming IFRS 16 practical class, click here
Scope of assignment
Working as your IFRS 16 tool modeler and implementer, we will undertake the following;
- Review of all rental property contracts and existing lease agreements, if any so as to effectively classify your leases for appropriate accounting treatment.
- IFRS 16 modelling and application to your bank; including measurement and disclosures summary
- We will conduct IFRS 16 briefing and training to your specified staff to empower them to meet the requirements of IFRS 16.
- Update your accounting and finance policy in respect to IFRS 16 compliance
- Make an easy to use IFRS 16 Ms Excel model for right to use and lease liability modelling based on your bank’s business model. This will facilitate swift IFRS 16 reporting and compliance
- Board and top management briefing on impact of IFRS 16 on your bank – after analysis of the results.
Our fees are negotiable. To comply easily with Bank of Uganda reporting requirements, your bank shall adopt the modified retrospective approach for IFRS 16 modelling.
|Phases||Description||Value to you||Fees (US $.) net of taxes|
|Phase 1: summitIFRS 16 Readiness Assessment to clarify whether contracts meet the lease criteria||Review of all rental property contracts and existing lease agreements, if any so as to effectively classify your bank leases for appropriate accounting treatment||Clear understanding of your bank leases for classification, and measurement||Complementary|
|Phase 2: summitIFRS 16 modelling||IFRS 16 modelling and application to Your bank; including measurement and disclosures summary||IFRS 16 model with clear impact on your bank’s profit & equity as at 31st December, 2018||Negotiable depending on the number of leased assets|
|Phase 3: summitIFRS 16 Training||We will conduct IFRS 16 briefing and training to your specified staff to empower them to meet the requirements of IFRS 16.||Empower your team, and reduce on-going compliance costs||Negotiable|
|Phase 4: summitIFRS 16|
|Update your bank’s accounting and finance policy in respect to IFRS 16 compliance||IFRS 16 lease accounting aligned to your bank’s finance policy||Negotiable|
|Phase 5: IFRS 16 Tool branding||Make an easy to use IFRS 16 Ms Excel model for right to use and lease liability modelling based on your business model. This will facilitate swift IFRS 16 reporting and compliance||Facilitate on-going reporting requirements by Bank of Uganda||Negotiable|
|Phase 6: summitBOARD BRIEFING||Board and top management briefing on impact of IFRS 16 on your bank – after analysis of the results.||Get buy in for budget approvals from the Board in relation to compliance needs for your bank||Negotiable|
|Phase 7: IFRS 16 on going compliance support||You have an option to retain Summit Consulting for the first-year effective contract signing date to deal with any BOU requests and reporting requirements||Train your finance team on the job by seeing how we respond to BOU issues||Negotiable depending on the number of months|