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IFRS Accounting for Real Estate

Pinpointing the areas of continuing uncertainty and difficulty in the new standards

IFRS Accounting for Real Estate Training Course

A one-day course

  • The course is designed to be a comprehensive guide on how to deal with real estate assets in a good, well prepared
  • set of IFRS financial statements
  • The course is highly practical and all the more challenging aspects will be introduced and explained
  • The course will be completely up-to-date and will be relevant for preparing accounts for financial years ending in 2020/21 that comply with all the current requirements
  • The course tutor will happily take questions on all aspects of the programme and will provide guidance with is unbiased and independent

With the specific needs of a wide range of real estate interests firmly in view, this course has been carefully designed to:
  • provide all interested parties with a comprehensive insight into the recent and forthcoming changes to IFRS as it affects entities exposed to the real estate sector, whether as investors, lenders, professional advisers, owner-occupiers, lessors or lessees
  • enable senior managers of entities exposed to the real estate sector to review their decision-making processes in light of the new accounting environment, especially in areas requiring or permitting the exercise of significant judgement
  • provide preparers of accounts with a firm basis for the practical implementation of the IFRS and EPRA reporting regimes
  • equip investors, analysts and advisers to make informed judgements about the financial performance, condition and prospects of entities exposed to the real estate sector

Owned property: a refresher on the (largely unchanged) accounting requirements | IAS 16, IAS 23 and IAS 40

  • Choosing between cost model and fair value model
  • Cost model: how to determine
    • Initial cost including borrowing costs and appropriate depreciation schedule
    • Identification and allocation of cost to separable elements
    • Identifying relevant indicators for impairment review
    • Estimating recoverable amount: ‘Value in use’ versus ‘Fair value fewer costs to selling’
  • Fair value model:
    • Estimating fair values (a) of unique assets and (b) in illiquid markets
    • Setting valuation assumptions
    • Trading and development properties

The shifting boundary between ownership and leasing | IAS 17 and IFRS 16

  • Overview of the key differences between IAS 17 and IFRS 16
    • ‘Right-of-use’ asset defined
    • Identifying a lease
    • Allocating consideration to lease and non-lease (service) components of a contract
    • Interaction between IFRS 16 and IFRS 15
    • Measuring a lease
    • Leases with variable payments
    • Lease modifications and options (extensions, terminations)
    • Subleases
    • Sale and leaseback transactions
    • Available options and how/when to use them
  • Detailed examination (from perspective of all parties) of typical transactions whose classification will change after the transition to IFRS 16
  • Financial impacts
    • Impact of IFRS 15 and 16 on published financial statements
    • Impact of the IFRS 9 expected loss impairment regime for all lease receivables
    • Impact on bank covenants and on modification of financings

Other continuing issues (examples only)

  • Rent-free periods and other incentives
  • Tenants’ improvements
  • Step-up rents
  • Disclosures, especially regarding management judgements, impairment and revaluations
  • EPRA performance measures, and the EPRA-to-IFRS reconciliation

The trainer qualified as a Chartered Accountant in 1987 with a six-partner firm, Gilberts, following completion of an accountancy foundation course. In the same year he joined Binder Hamlyn to work in their Business Development Group.

In 1990 he joined a major training company to work as a trainer on their accountancy exam courses. During the next four years he taught auditing, financial reporting and taxation for ACA, ACCA, CIMA and AAT exams, he also taught the ACA multi-disciplinary case study. He mainly taught on full-time courses organised for Deloitte, PWC and EY; he was also personally responsible for the ACA final level auditing paper.

In 1993 he became a director of post-examination CPD training for accountants. He was also responsible for financial training programmes for non-accountants especially solicitors. Around this time, he also started training in International Accounting Standards initially for Ernst & Young’s non-UK based professional staff in Europe.

Since 1998 he has been training on a freelance basis, concentrating on financial training for both accountants and non-accountants. The trainer also specialises in training on IFRS and US accounting standards and has presented on both subjects throughout Europe for the past 20 years. He has considerable experience in presenting training on the following topics:

  • Accounting for financial instruments and insurance contracts
  • IFRS reporting issues for energy and pharmaceutical businesses
  • Completion accounts and the role of financial standards in corporate finance transactions
  • Accounting for business combinations – mergers, acquisitions and all joint and special purpose arrangements.

After a long period of stability, the IFRS regime for real estate assets and transactions is entering a period of rapid change and elevated uncertainty, with the imminent introduction of three major new financial reporting standards. IFRS 16 Leases, effective from 1st January 2019, substantially and controversially redraws the boundaries between operating and finance leases: IFRS 9 Financial Instruments, effective from 1st January 2018, brings all lease receivables into the scope of compulsory impairment provisioning based on expected credit losses; and IFRS 15 Revenue from Contracts with Customers, also effective from 1st January 2018, whilst retaining the basic IFRS principles for revenue recognition, calls for much more attention to be paid to the unbundling of the separate components in longer-term contracts.

At the same time, continued dissatisfaction with IFRS-based numbers, specifically as a basis for cross-border intercompany comparisons, underlines the importance of the industry-specific non-GAAP performance measures developed by EPRA.

At every stage, the course will pinpoint the areas of continuing uncertainty and difficulty in the new standards, whether in their interpretation, application or implementation by preparers or in their analysis by external users.

The course makes extensive use of real-life comparative case studies and fully worked examples.

  • I was hoping that I will get more familiar with the IFRS subject, and after two days of class I actually did. It approached those topics that leave room for interpretations in daily basis activity

Have this course presented In-House

  • On a date, time and in a location of your choice
  • Topics expanded or deleted to your bespoke requirements
CLICK HERE TO REQUEST A FEE QUOTE

Have this course pre-recorded

  • Full course recording edited exclusively for your company
  • Files converted to enable housing on your LMS
CLICK HERE TO REQUEST A FEE QUOTE

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