COVID-19, IFRS-16 and Flexible Offices

It’s been well over a year since the new financial accounting legislation IFRS 16 was implemented and the impact is still being felt on company balance sheets worldwide. These effects have been exacerbated by the economic fallout from COVID-19 and a major shift in how people choose to work. 

IFRS 16 was introduced by the International Accounting Standards Board and ensures that contractual commitments for assets like office space cannot be hidden in the small print of company balance sheets and reports. Instead, these must be fully recorded as liabilities with the exception of leases of 12 months or less with no purchase options. Instead, companies can now treat these obligations as cash flow expenses. 

By eliminating nearly all off-balance sheet accounting for lessees, it’s having a direct and significant impact for all corporate real estate professionals and may influence their strategies on previously favoured long term leases. Instead, these accounting changes along with a pandemic-driven desire to work from anywhere may drive the use of short term, flexible leases as part of any company’s real estate portfolio. 

IFRS 16 also presents many benefits to companies completing a raise or looking to sell their business, as they no longer need to have their balance sheets saddled with the liability of long-term lease obligations. 

At Workhaus, teams of all sizes rely on us to provide safe spaces that are conducive to productivity, collaboration, and creativity. Whether it’s for 1 or 100, our completely flexible lease terms can not only reduce pressure on the books but also come with the following important benefits: 

• Ability to upsize or downsize quickly
• Only pay for the space you use, when you need it
• All inclusive business services, amenities, and community programming
• One fully inclusive monthly invoice
• Minimal operational resources required
• Custom bespoke solutions to fit your company requirements
• Utilization of community coworking space
• Premium, amenity-rich locations to attract and retain talent

… and much more! 

If you’re looking for your next home away from home (this has a new meaning now, doesn’t it?), check out our premium locations and get in touch today to schedule your tour!