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Incremental Borrowing Rates - Market Analysis

Emerging and ongoing trends in lease discount rates for Australian companies

Deloitte and Quadrent have partnered to perform an analysis on actual IBRs adopted by both public and private companies in their lease reporting over recent years. Our findings largely suggest that an improved IBR strategy may present the opportunity to benefit from the rapidly changing economic environment and optimise balance sheet and profitability metrics.

Deloitte & Quadrent Incremental Borrowing Rates - Expert Analysis

Our analysis has noted the following:

Many organisations have not updated their IBRs and are using IBRs determined at the date of transition to AASB 16 for leases newly incepted or modified in 2021, despite market movements

Although this could be due to the significance of new leases, IBRs should not be viewed as a compliance-only exercise

Applying the correct IBRs could have a significant positive impact on key financial ratios. An improved IBR strategy may better position organisations to benefit from the rapidly changing economic environment and optimise their balance sheet and profitability metrics.

Deloitte's IBR Calculator and Quadrent's IBR Analytics Tool are unique asset offerings which can assist you with managing, planning, and optimising your organisation's IBR.

Download our publication now to learn more.

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