Signal Lab

AASB 16 Lease BS Impact

AASB 16 (Australian Accounting Standards Board · ≈ IFRS 16) — ROU (right-of-use) asset + lease liability, and what it does to ratios and covenants

Balance Sheet Cash Risk What-ifs

Signal Lab · Model

AASB 16 Lease BS Impact

PV (present value) of lease payments at the IBR (incremental borrowing rate) → opening liability and ROU. Current vs non-current split; before/after current ratio, NWC (net working capital), and net debt. Full amort schedule is Excel-only.

Default AU sample is tuned to illustrate the covenant-warning path (not a bug) — replace with your actuals. Not financial advice. Lender defs vary. Payments modelled as an ordinary annuity (end of period), not annuity-due.

Lease terms and pre-AASB 16 balances

Payment × term × frequency discounted at IBR. Persist locally · Jump to impact

Pre-AASB 16 balance sheet (for before/after ratios)

Optional covenant warning threshold.

ROU, liability split, before/after ratios

Opening ROU = opening liability when no IDC (initial direct costs)/incentives. Full amort in Excel export.

Equations

  • Opening lease liability = PV (present value) of remaining lease payments at periodic IBR (ordinary annuity — end of period)
  • ROU (start) = Opening liability (no initial direct costs / incentives in this sketch)
  • Current lease liability ≈ principal portion of payments due ≤ 12 months
  • After current ratio = CA ÷ (CL + current lease liab) · After NWC = CA − (CL + current lease)
  • Net debt incl. leases = Net debt ex-lease + total lease liability

Full period-by-period amortisation schedule ships in the Excel workbook — this page shows opening PV and the ≤12-month current split only.

How this is calculated
  • Periodic rate = IBR ÷ payments-per-year. Periods = term months × (payments-per-year ÷ 12).
  • Annuity PV = PMT × [1 − (1+r)−n] ÷ r (or PMT × n if r = 0).
  • Current portion walks the first 12 months of principal reduction on an amortising lease.
  • AU AASB 16 aligns with IFRS 16 measurement for this illustrative desk model.

Illustrative — not financial advice. Measurement exemptions and reassessments omitted.

What-if IBR / term

IBR ±bps and term months — live PV and after ratios.

Sensitivity

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