Discount rate under IFRS 16

All topics related to IFRS Standards.
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Radhika
Posts: 5
Joined: 18 Jul 2020, 17:47

Discount rate under IFRS 16

Post by Radhika »

I need some pragmatic approach taken for inter group companies that are fully funded by their parent companies.
Is group discount rate appropriate as starting point to determine the entity's incremental borrowing rate.
Bhavan
Posts: 3
Joined: 22 Jul 2020, 20:15

Re: Discount rate under IFRS 16

Post by Bhavan »

we use our corporate borrowing rate as group discounted rate across all our subsidiaries. Hope this context help
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Marek Muc
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Joined: 15 Oct 2018, 17:21
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Re: Discount rate under IFRS 16

Post by Marek Muc »

it all depends on how this group discount rate was determined :)
two major points to take into account:
- each currency should have its own discount rate
- differences in credit standing between the parent/group and the subsidiary should also be taken into account
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