ifrs 16 compliant

Are You IFRS 16 Compliant?

Do you know what IFRS 16 is? If not, you should. It went into effect January of this year and governs how businesses disclose their lease expenses. Many companies utilize rentals or leasing agreements to gain access to assets for operations. For example, a retail store leases its commercial space from a mall or other landlord for an extended period of time, while a national sales team may lease vehicles for travel.

The new IFRS 16 changes will standardize many lease considerations across industries and affect asset values for companies of all types and sizes. Each industry has its own set of considerations for lease decisions. Overall, the updated IFRS 16 leases will require more paperwork, accountability, and transparency from all private businesses.

The IFRS 16 effective date was January 1 of 2019, but the changes have been approved and public since January of 2016. That means there’s no excuse not to be up-to-date on the new protocol. The sooner you recognize the impact this new standard will have on your business, the better prepared you will be to solve potential problems, reduce implementation costs and lower compliance risk.

For your business, these changes will require more time, resources and human capital to handle the mandatory workload increase needed for compliance. But overall, the new practices and standards should improve the financial health of all companies and the health of the national economy, making its net benefits worth the collective accounting headache. This blog will give an IFRS 16 summary and offer advice on how small businesses can comply with its new guidelines.

Why The Switch?

The International Accounting Standards Board chose to replace the IAS 17 standards with increased recognition, measurement, presentation and disclosure of leases for both parties of a business lease or contract for multiple reasons. Over time, the new IFRS 16 process should help many companies recover forgotten lease agreements, auto-renewals or other areas where financial losses can be cut. 

IFRS 16The Effects Analysis explains that one likely benefit of IFRS 16 changes includes the fact that listed companies around the world have around $3 trillion worth of future payments for leases, which were not accounted for on the balance sheet under the old accounting standards.

General wisdom says that these updated standards will ultimately empower businesses by optimizing revenue and strengthening the financial scope of every company. It will also help all organizations to ‘future-proof’ their business model ahead of the next regulatory challenge that might appear, by changing how they project future assets and liabilities.

Implications

A Clearer Reality

IFRS 16 will increase the visibility of every company’s lease agreements and better reflect our collective economic reality. The new standard will also make it easier to compare companies that lease assets with companies that borrow money to buy assets, creating a more even playing field for investment and entrepreneurship.

More Services, Fewer Assets

Experts project that the new standard may affect lessors’ business models and offerings. It could also accelerate existing market trends in leasing including the increased focus on providing services instead of physical assets.

New Data Points & Metrics

The new standard will also redefine commonly used financial metrics like EBITDA and the gearing ratio. It will also eliminate nearly all off-balance sheet accounting for lessees. This will make comparability easier, and may also affect covenants, credit ratings, borrowing costs and stakeholder perception of businesses that borrow.

Restructuring & Renegotiating

Restructuring and renegotiating may also become common as lessees and lessors will need to consider how to best adjust their negotiation strategies for new and existing leases. Joint ventures and special purpose entities could also be affected.

Big Losers

If you are in the Retail, Telecommunications, Transport & Logistics or Real Estate & Equipment Leasing, your business is projected to be the most impacted by IFRS 16. Retailers, for example, could take a projected 98% increase in debt following the new considerations.

IFRS 16 leasesNotable Exemptions

An important exemption to the new IFRS 16 standards is made for leases of low-value assets like tablets and personal computers, small items like furniture and telephones and other minor assets worth under $5,000.

A similar exemption exists for leases that last 12 months or less. In such cases, a lessee acknowledges the lease payments in profit or loss on a straight-line basis over the lease term.

Steps To Make Sure Your Business Is Compliant

According to PwC, companies should “understand the impact of the new standard and develop an early communication strategy to manage its stakeholders (and their perceptions). This includes extracting, gathering and validating lease data, assessing the impact and preparing for the re-design of its IT systems and processes impacted by the new standard.”

Dig Through Your Records

The first step of the IFRS 16 compliance process is digging up all of an organization’s leases no matter where they may be collecting dust. 

Get The Record Straight

In order to pull the necessary data out of these old records, you will need all leases saved in a single, searchable location in a search-readable .pdf file. Analytics systems can help you efficiently manage this important data and standardize it across categories.

Manually Confirm New Data Points & Submit

You will need to apply additional man-hours to manually check that each of your updated leases has considerations of the following data points:

“Lessor information, lease start date, full contract duration, lease incentives, frequency of rentals, index or rate-based variable payment, index or rate at the date of commencement, current rate, frequency of revaluations to latest index or rate, residual value, rate implicit in the lease, restrictions or covenants imposed, termination terms, termination breach, lease termination date, termination breach penalty payment, purchase option, purchase price, purchase option reasonably certain to be exercised, extension option, rent payable under extension, rent review fixed uplifts, rent review uplift to market rate, rent review frequency of uplifts, rent review date, contract type, contract number, contract currency, rental space, address, contract reference, signatures, among others.”

More Questions About IFRS 16?

Do you see why understanding IFRS 16 leases is such a big deal for so many businesses? By eliminating the grey area and elevating the nation’s business conscious, IFRS 16 could have a huge impact on how all businesses operate moving forward.

At Alexa’s Workspaces, we concentrate on our clients’ needs, so they can concentrate on growing their business. If you are looking for first-class amenities, as well as a fully-customizable and flexible space to suit your specific needs – look no further! 

Call 954-745-5800 today and see why, at Alexa’s Workspaces, we don’t have clients – only colleagues.

flexible workspaces

Why Therapists Can Benefit From Shared Office Spaces

Open workspaces aren’t just a thing of the future. For many businesses, including multi-billion-dollar start-up, WeWork, they’re a thing of the present. And flexible workspaces have been a true gift to specific industries and professions in today’s rapidly-evolving economy.

This post will explore the benefits of flexible workspaces to therapists and other professionals with similar office needs. It will also detail some of the benefits businesses can expect when using open workspaces, including efficiency, flexibility, and cost-effectiveness. To top things off, we will touch on how these benefits could help a therapist who runs their own practice.

The Benefits Of A Flexible Workspace

Flexible workspace companies leverage the same economic and social trends that make ridesharing apps like Uber and other gig economy start-ups like Airbnb and TaskRabbit some of the most valuable companies in the world.

One in four Americans now takes part in the gig economy, where freelancers trade assets or services that would have previously been handled by specialists. And just as Uber and Airbnb have created conundrums for the transportation and hospitality establishments, WeWork and other flexible workspaces have drastically shifted the landscape of commercial real estate and off space rentals.

If you’re still asking, “what is a flexible workspace?” there’s a chance you’ve been fortunate not to be affected by the real estate and financial turmoil of the past decade. But many freelancers, managers, and executives are well aware of the market conditions that make open office spaces so attractive to today’s businesses.

flexible workspace companiesThe Benefits Of Flexible Workspaces

 

Cost

By forgoing a long term lease or permanent purchase of a property, a business owner will save considerable costs that can be invested in improving the core business. They will also avoid overhead costs that come with maintaining your own office space. Triple net costs including utilities and maintenance could make your lease agreement a debilitating expense. 

Flexibility

Flexible workspaces are just that — Flexible. Another benefit of not buying or leasing a long-term office space is the financial and time flexibility you will experience. 

Flexible workspaces often have a variety of packages for short and long-term tenants to choose from, which allows owners to focus on staff, innovation and growth instead of the additional expenses and stresses that come with owning or leasing your own property. They also often have a variety of locations in one city, giving the option for rescheduling or relocating a meeting or for convenience.

Amenities

Many modern workspaces attract clients with amenities and exclusive member benefits. Soho House in New York and Los Angeles attracts elite artists and influencers with chic restaurants, bars, cinemas, spas, workspaces and residency options. Another example is Alma, a successful and flexible workspace with a revolutionary approach to therapy.

Why Therapy Should Be Flexible

A therapist’s office space should be comfortable and convenient for both the therapist and the patient. Alma is the proof-of-concept for this idea and a model that any therapist might want to consider adopting and adapting for their own practice. 

what is a flexible workspaceAlma offers a co-practicing community of therapists, coaches, and wellness professionals to patients looking for a new approach.

Alma gives providers the tools and resources they need to operate and grow a private practice including office space and online billing services. Patients can shop for providers by degree, service type, specialty, or location. It’s only a matter of time before communities like these are thriving all around the country thanks to like-minded professionals and their crowd-sourced tools.

Alma acknowledges on their website that “the experience of therapy is complicated. For patients, it’s hard to find the right therapist, it’s scary to ask for help, and most therapy spaces don’t feel like a protected, comfortable environment for great care. For mental health providers, it’s hard to find flexible office space, daunting to figure out the right tools and processes to run your business, and isolating to work in private practice.” These are all reasons why Alma exists.

Flexible workspaces like this can create a community of top-quality mental health services. Therapists and mental health professionals are surrounded by peers who can offer support, collaboration, and client referrals. And when it happens in a beautifully designed, flexible office space like Alma’s, with easy-to-use-technology to simplify communication, scheduling, and accounting, it’s a dream come true for everyone involved.

Ready To Get To Flexible?

At Alexa’s Workspaces, we concentrate on our clients’ needs, so they can concentrate on growing their business. If you are looking for first-class amenities, as well as a fully-customizable and flexible space to suit your specific needs – look no further! 

Call 954-745-5800 today and see why, at Alexa’s Workspaces, we don’t have clients – only colleagues.

rent a virtual office

What to Expect When You Rent a Virtual Office

The very first thing you can expect when renting a virtual office space is flexibility. You will not be tied down to a permanent office space, and in fact, you do not even need to be in the same city in order to have a presence there. You will be able to use the corporate address and have access to a private phone number of your own all while working out of an entirely different place. 

Benefits of a Virtual Office

The benefits of a virtual office are numerous. One of the primary benefits of a virtual office space is that your business will appear and be perceived as larger and more established, as well as enabling you with access to all the amenities of a dedicated office. You can stay in contact no matter where you are by having all the calls coming into your virtual office forwarded to your cell. You no longer need to worry about mail while you are away since your mail will be received, signed for, and stored in the office’s mail center or delivered to you; it is your choice. 

Virtual Office SpaceAn office is not only space, it can also be a collection of services that make your business flourish. For example, clerical assistance, notary services, even catering services, can be part of your virtual office plan.  

Many small business owners and freelancers use their personal mobile numbers as their primary means of contact. When you rent a virtual office, you can get a 1-800 or a local number, personalized phone answering, as well as call forwarding both domestic and international and voicemail to email notifications. Similarly, your mail can be taken care of, stored or forwarded. 

In terms of amenities, you can have access to meeting rooms featuring the best technology available including high-speed internet, and audio and video conferencing. All of this while you take care of business from the comfort of home or on the other side of the world.

When you receive a client in your virtual office you can expect them to be impressed, starting with the luxury lobby and the friendly receptionist. You will make the right first impression with your office being housed in a beautiful building near the heart of the city. 

Virtual Office Space Near MeFinding a Virtual Office Space Near Me

Any entrepreneur or small business can expect to benefit from the flexibility and amenities of a virtual office space at an affordable price. If you are in South Florida, you can take advantage of a great virtual office space near you. Near Hollywood’s downtown, housed in a beautiful complex with easy access to the highway Alexa’s Workspace office is located at 3440 Hollywood Blvd., Suite 415 Hollywood, FL 33021. 

And in Fort Lauderdale, we offer world-class amenities at a premier building with free shuttles to both Las Olas Boulevard as well as the courthouse; you can find us at 1 East Broward Blvd., Suite 700 Ft. Lauderdale, FL 33301. 

Contact our Ft Lauderdale offices today at (954) 745-5800 or our Hollywood offices at (954) 241-4200.

renting conference rooms

Help Your Business Evolve by Renting Conference Rooms in South Florida

The way people do business has undergone a very large transformation over the past two decades. Today more people are running their business from the comfort of their home – according to data from the US Census, eight million people worked from home in 2017. For many day-to-day operations you may not need a traditional office and using the extra space you have in your home can be the perfect solution; however, there are instances when working from home can damage your business and could give people the wrong impression.

Impress and Dazzle Your Clientele

There is no doubt that receiving a potential customer in your living room will not give the same impression as meeting him or her in an executive office space, in a top-notch conference room with all the technology and amenities you will need to impress and dazzle your audience and turn a prospective client into a customer. Conference rooms are also good for other reasons besides client meetings, such as contract signing, networking events, potential employee interviews, brainstorming sessions, and employee training. 

Executive Office SpaceShared Office Spaces Can Cut Cost

The expense that comes with having such a space tends to be well beyond the reach of a smaller business and the investment simply cannot be justified. In response to this need, businesses wanting to have access to the best invest in shared office spaces. You can have access to an amazing space featuring every amenity you or your business would need for maximum efficiency. 

Some of these amenities include: 

  • Professional furniture
  • Whiteboards
  • Hi-speed internet
  • Professional on-site receptionists
  • Concierge services
  • Hot beverages
  • Audio and video conferences

With a cost-effective workspace, your clients and staff alike can enjoy all of these features while your business pays only a fraction of the cost. You use the space when you need it, you’re able to give the right impression when you have a meeting, and when you are done with the space, someone else can access it instead. This way, the costs are shared, but the benefits are essentially the same as if you owned the space all by yourself.  Having a cost-effective workspace that molds to your needs and does not break the bank will help your business evolve to the next level.

Shared Office SpaceVirtual Offices Give You Flexibility

Another option for a cost-effective workspace that offers conference rooms is a virtual office. Virtual offices are often available on a month-to-month basis with no set-up fees – just sign up and you’re ready to go! Not having any meetings next month and you don’t want to have the expense of an office? Not a problem. You can forgo having an office this month and get one again when you need it.  With virtual offices, you also have the power of having multiple locations without the added costs.

If you are looking for first-class amenities, as well as a fully-customizable and flexible space to suit your specific needs – look no further! Contact Alexa’s Workspaces today at 954-745-5800 today and see why, at, we don’t have clients – only colleagues.