Why Incremental Borrowing Rates Are Actually A Strategic Opportunity

The transition to the AASB 16/IFRS 16 standard proved a challenge for many Australasian businesses and made a lasting impact on key balance sheet metrics. On top of this, the current upward trend in market interest rates and inflation is providing further economic challenges for 2022.

Proactively and strategically managing your Incremental Borrowing Rate (IBR) is one way to deliver more beneficial reporting metrics for your organisation. However, IBR is the area where significant judgement is required. Therefore, a well-researched and structured application of an IBR strategy is critical to optimise key financial metrics, especially given this rapidly changing economic environment.

Deloitte and Quadrent have been monitoring the calculation, management, and application of IBRs closely since the adoption of AASB 16/IFRS 16 in January 2019 and recently published a joint report presenting some surprising findings.

Catch up with a recording of our webinar. We cover:

• Discussing these report findings in greater depth 
• Detailing how they could commercially impact your business
• What proactive steps can be taken to enable you to optimise the levers at your disposal for balance sheet management and organisational decision-making.

Fill out the form here to get the recorded version of our webinar and slides.

As this webinar is an activity that increases your knowledge, skills and abilities, it can be recognised as CPD hours.

Partner: Treasury & Capital Markets at Deloitte Australia

As a Partner in Deloitte’s Treasury and Capital Markets Team, Lammert leads the Quantitative Financial Risk Management and Asset Enablement offerings out of Deloitte’s Assurance practice. This includes Deloitte’s online IBR tool, an application that enables Deloitte’s clients to accurately calculate discount rates required to fair value leasing arrangements under IFRS 16.

Stefan Iggo

LOIS Client Success Director at Quadrent

Damon has over 20 years’ commercial leasing experience and has been at the forefront of industry innovations that help businesses deal with IFRS 16 compliance – specifically via LOIS (Quadrent’s IFRS 16 lease accounting SaaS solution).