IFRS 16 and the dawn of open-end leases in Europe

The leasing industry in the UK – and throughout Europe – is changing.  Driven in part by the upcoming change in accounting rules, which is pushing companies to reassess their leasing strategies, companies are focused on generating significant savings by concentrating on the total cost of vehicle ownership. Historically, accounting rules in these regions have permitted organisations to exclude certain leases from being disclosed on a company’s balance sheet. When IFRS 16 goes into effect in January 2019, companies will be required to report all leases on their balance sheet.

IFRS 16 and the dawn of open-end leases in Europe

Feb 06, 2018

The leasing industry in the UK – and throughout Europe – is changing.  Driven in part by the upcoming change in accounting rules, which is pushing companies to reassess their leasing strategies, companies are focused on generating significant savings by concentrating on the total cost of vehicle ownership. Historically, accounting rules in these regions have permitted organisations to exclude certain leases from being disclosed on a company’s balance sheet. When IFRS 16 goes into effect in January 2019, companies will be required to report all leases on their balance sheet.

‘Trial of the century’ takes on Hell or High Water clause

Among US equipment leasing lawyers, there is perhaps no contractual provision more important, more universal, more indispensable - perhaps more sacrosanct - than the widely revered and utilized hell-or-high-water clause. Under this provision, which appears in one form or another in virtually every commercial equipment lease agreement signed over the past 40 years, the lessee agrees that the lease is non-cancelable, that the lessee’s obligations under the lease are irrevocable, that rental payments must continue to be made under any and all circumstances (including the loss or destruction of the leased equipment), and that all defenses, setoffs, and counterclaims to any action for enforcement of the lessee’s obligations are waived.

‘Trial of the century’ takes on Hell or High Water clause

Jan 09, 2018

Among US equipment leasing lawyers, there is perhaps no contractual provision more important, more universal, more indispensable - perhaps more sacrosanct - than the widely revered and utilized hell-or-high-water clause. Under this provision, which appears in one form or another in virtually every commercial equipment lease agreement signed over the past 40 years, the lessee agrees that the lease is non-cancelable, that the lessee’s obligations under the lease are irrevocable, that rental payments must continue to be made under any and all circumstances (including the loss or destruction of the leased equipment), and that all defenses, setoffs, and counterclaims to any action for enforcement of the lessee’s obligations are waived.

UK tax-based leasing survives accounting changes

A consultation document issued in December by HM Revenue & Customs (HMRC) confirms the apparent implication of a Budget day announcement last month. The UK authorities have now broadly decided how the rules for the tax treatment of plant and machinery leases (including those of vehicles) should change as a result of the new international lease accounting rules in the IFRS 16 standard, bringing all leases on the lessees' balance sheets. They have done so in a way that will be widely welcomed by the leasing industry.

UK tax-based leasing survives accounting changes

Dec 21, 2017

A consultation document issued in December by HM Revenue & Customs (HMRC) confirms the apparent implication of a Budget day announcement last month. The UK authorities have now broadly decided how the rules for the tax treatment of plant and machinery leases (including those of vehicles) should change as a result of the new international lease accounting rules in the IFRS 16 standard, bringing all leases on the lessees' balance sheets. They have done so in a way that will be widely welcomed by the leasing industry.

BREXIT

Negotiators struggle to build bridges as Brexit looms

Nov 10, 2017

While business leaders in the UK and Europe have stressed the importance of a smooth Brexit transition to protect the economies of both sides, there are signs that negotiators are struggling to find common ground on key issues. As the Brexit deadline of March 28, 2019 approaches, this special report looks in detail at progress from both sides of the negotiating table.

 

General legal and regulatory

Moneybarn investigated by Financial Conduct Authority

Dec 05, 2017

Provident Financial has been informed that its car finance division is being investigated by the UK Financial Conduct Authority. A review has commenced into Moneybarn in relation to the processes applied to customer affordability assessments for vehicle finance and the treatment of customers in financial difficulties.