Driven by political and economic uncertainty in Europe, businesses are increasingly seeking shorter-term arrangements to expand or downscale as their needs change. With the introduction of IFRS 16, LeadCandy has seen a significant increase in demand, with many UK businesses opting to rent serviced office space rather than be tied into a lengthy lease.

Demystifying IFRS 16 Regulations

Until recently, a traditional lease was defined as either a finance or an operating lease. The advantage of an operating lease was that the asset was expensed, leaving the balance sheet unaffected. As of January 2019, the distinction between operating and finance leases changed, meaning all leases can be capitalised. Note that the new regulations will apply to non-public companies from 2020. This means all leases of one year or more must be recognised on the balance sheet as assets and liabilities. Only leases with terms of less than one year will be excluded from the new regulations, prompting many tenants to consider switching from conventional office leases to serviced office arrangements to avoid the annual interest charge and the reduced financial advantage of leasing.

The IFRS 16 Loophole

Serviced office agreements of 12 months in term will help you avoid the implications of IFRS 16.

✔ The speed of occupation for serviced office space over traditional leasehold workspace is greatly reduced.

✔ No long-term financial commitments, including reduced legal fees.

✔ One simple monthly bill for ease of accounting.

To find out more information on IFRS 16, visit IFRS.org, or to learn about the areas that we cover in London, check out our London Coworking Guide. And we look forward to helping you find your next coworking space.

Looking For Office Space in London?

If you are looking for office space in London, we can show you a variety of flexible workspaces throughout the City of London. To find out more about the areas that officebroker.io covers in London, check out our London Postcode Guide or our Coworking Guide.