IFRS 16 - IBR
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IFRS 16 - IBR
Hello, Upon merger of two subsidiaries (lessee's) leading to a novation of the lease agreement (novated from merged entity to surviving entity), should the IBR be revised for consolidated reporting OR as the merger is a common control transaction therefore balances could be transferred without remeasuring lease liabilities basis the IBR of the surviving entity? Thanks for your help in advance.
Senior Compliance & Reporting Manager
Ocean & Logistics Reporting & Accounting
Maersk Group
Ocean & Logistics Reporting & Accounting
Maersk Group
Re: IFRS 16 - IBR
what method did the surviving entity use to account for the merger?
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- Trusted Expert
- Posts: 300
- Joined: 16 Feb 2023, 18:10
- Location: Germany
Re: IFRS 16 - IBR
The surviving entity has followed the common control combination meaning a carryover of all exact same values from the merged entity. Since IFRS 16 stresses upon the usage of incremental borrowing rate that is lessee specific therefore I am unsure if lease liabilities should be remeasured basis the IBR of the surviving entity for the consolidated reporting. Thanks.
Senior Compliance & Reporting Manager
Ocean & Logistics Reporting & Accounting
Maersk Group
Ocean & Logistics Reporting & Accounting
Maersk Group
Re: IFRS 16 - IBR
I would not remeasure the lease liability consistently with the approach taken for other assets and liabilities.