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31/05/2011 - At the Heliview fair in Nieuwegein, Dragintra not only brought a refreshing approach, but also came up with some news with the launch of its new website, presenting information, news and solutions for the effective and efficient management of your car fleet within the changing fleet management market.
One of the latest developments is the introduction of the IFRS accounting regulations which your business will be required to comply with (in the short term).
The IFRS (International Financial Reporting Standards) accounting regulations will become mandatory for all listed companies (as from 2015) to begin with. These regulations standardize the way in which the financial administration of leased goods must be recorded and reported.
The IFRS rules are primarily concerned with the (financial) reporting of your vehicle fleet. Under IFRS regulations, this reporting will change dramatically in relation to the current rules.
What are the consequences of those regulations for your organization? How can you prepare for this and deal with this as effectively and efficiently as possible?
As the rules stand now, leased cars are not the "property" of your organization. The lease contract is not a form of financing that has to be recorded as borrowed capital, and therefore has no impact on solvency. With the introduction of the IFRS standard, the off-balance character of car leasing will change. There will be no more difference between Operational Lease (Off Balance) and Financial Lease (On Balance). There will only be On Balance financing. The leased cars must therefore be entered on the balance sheet as borrowed capital. In addition, the introduction of IFRS will mean that all current lease contracts have to be analyzed for the purposes of the required notes to the annual accounts.
In other words, besides the impact on solvency, the administrative burden will increase because of the reporting requirement. Depreciation, interest and service will have to be administratively processed month by month. For instance, if you work with several leasing companies, different lease terms and different lease forms, this will present a major challenge for you.
With its long experience and focus on fleet management and fleet management solutions, Dragintra can help you and advise you in this process.
This user-friendly web-based application is the perfect tool to set up and arrange your reporting system according to IFRS rules in a straightforward and easy way and to report universally with one push of a button, no matter how many leasing companies, lease forms and lease terms you work with. The better you understand your fleet, the better you can run it.
For more information, contact your account manager or click here.