Incremental borrowing rate and Incremental cash flows: Difference between pages

Revision as of 14:19, 23 October 2012

In financial decision making, the incremental cash flows are those which will be different, depending on whether or not the decision is implemented.

It is only the incremental cash flows which should theoretically be taken account of in making the related financial decision.

For example, 'Sunk costs don't count'.

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-''Financial reporting - IFRS 16''.
+In financial decision making, the incremental cash flows are those which will be different, depending on whether or not the decision is implemented.
-(IBR).
+It is only the incremental cash flows which should theoretically be taken account of in making the related financial decision.
-The lessee's Incremental Borrowing Rate is a key concept in financial reporting for leases under IFRS 16.
+For example, 'Sunk costs don't count'.
+== See also ==
+* [[Cashflow]]
+* [[Discounted cash flow]]
-The incremental borrowing rate is the rate the lessee would pay to borrow:
-*Over a term similar to the lease term
-*With a similar security
-When the interest rate implicit in the lease cannot be determined, the IBR shall be used instead, to discount the related lease liabilities and assets for reporting under IFRS 16.
-Note that a lessees's incremental borrowing rate is likely to differ from their existing borrowing rate under other borrowing arrangements.
-==See also==
-*[[DIA]]
-*[[IFRS 16]]
-*[[Internal rate of return]]
-*[[Interest rate implicit in a lease]]
-*[[Lease]]
-==Other links==
-[https://www.treasurers.org/thetreasurer/definitive-guide-to-deriving-ifrs-16-discount-rates Definitive guide to deriving IFRS 16 discount rates: The Treasurer]
-[[Category:Accounting,_tax_and_regulation]]
-[[Category:Compliance_and_audit]]