IFRS 16, indication of effects of future adoption with quantification

Worldpay Group plc – Annual report – 31 December 2016

Industry: financial

Section 1 – Basis of preparation (extract)

New standards and interpretations not yet adopted (extract)

IFRS 16 ‘Leases’ – eliminates the distinction between on-balance sheet finance leases and off-balance sheet operating leases and introduces a single, on-balance sheet accounting model that is similar to current finance lease accounting. The effective date is no later than 1 January 2019, although earlier adoption is permitted only if IFRS 15 ‘Revenue from Contracts with Customers’ is also adopted. The Group has completed an assessment of the impact of implementing this standard. On implementation, based upon the Group’s existing lease arrangements, approximately £70m ‘right of use assets’, mainly related to property, will be recognised in the Consolidated Balance Sheet together with a corresponding lease liability. Operating costs will be reduced by approximately £11m, increasing EBITDA by £11m. Depreciation on the right of use asset will be approximately £8m and lease interest will be approximately £3m which means we do not expect there to be a material impact on Net income.