IFRS 16 & ASC 842 Vancouver: Year-End Audit Readiness
Vancouver CFOs—get audit-ready on IFRS 16/ASC 842 with lease registers, ROU asset models, and disclosure packs tailored for BC groups.
Introduction
BC operators with multi-site real estate and equipment leases—especially in the Lower Mainland—tend to struggle with completeness and model governance. For Vancouver finance teams, year-end success under IFRS 16 Vancouver and ASC 842 BC comes down to tight inventory, clean data, and a documented model.
1. Lease Inventory Completeness
Completeness is the cornerstone of IFRS 16 and ASC 842 compliance. Many service contracts in Canada embed lease components—such as dedicated servers, warehouse space, or equipment commitments—that finance teams overlook. A reconciled lease register is essential, linking contracts, amendments, and schedules back to the general ledger. Auditors will always test for completeness, so CFOs must demonstrate that all arrangements with potential lease elements were reviewed and classified properly. This involves close collaboration between procurement, operations, and finance to capture contracts that might otherwise slip through the cracks.
2. Data Quality and Contract Terms
High-quality data drives accurate lease accounting. Missing or inconsistent details—such as lease terms, renewal or termination options, CPI escalators, or non-lease components—create risk. Canadian companies need systematic processes to capture every required data point. For example, many contracts contain clauses that shift responsibility for insurance, maintenance, or utilities, which must be separated from lease payments under IFRS 16. Verification should include cross-checking contracts against the lease register, testing calculations, and ensuring amendments are recorded promptly. Strong data integrity reduces audit adjustments and improves the credibility of disclosures.
3. Model Governance and Integrity
Building an accounting model is not enough—auditors expect evidence of governance. A compliant IFRS 16/ASC 842 model must document key assumptions such as discount rates, remeasurements, and modification handling. For example, how did management determine the incremental borrowing rate? What methodology governs reassessments of lease terms? Without this documentation, auditors may challenge the results, delaying year-end close. Finance teams in Vancouver should establish clear procedures for maintaining the model, testing formulas, and validating outputs against the lease register. Model integrity ensures that lease liabilities and right-of-use (ROU) assets flow correctly into the financial statements.
4. Internal Controls and Approvals
Controls are just as important as calculations. Under both IFRS 16 and ASC 842, companies must show evidence that lease data and assumptions were reviewed, approved, and updated appropriately. This means defining clear roles for initiators, approvers, and reviewers. For example, procurement may identify contracts, accounting may capture lease terms, and finance leadership may validate discount rates. Review evidence—such as sign-offs, workflow approvals, or documented checklists—should be retained. In Vancouver’s mid-market, companies without defined controls often face audit pushback, as spreadsheets and ad-hoc models lack proper oversight. Implementing structured controls reduces risk and builds credibility
5. Disclosure Readiness
Auditors expect disclosures to be transparent, complete, and reconcilable. Year-end reporting under IFRS 16 and ASC 842 requires both quantitative and qualitative information:
Maturity tables of lease liabilities.
Roll-forwards of ROU assets and lease obligations.
Qualitative policies explaining lease classification, discount rate methodology, and practical expedients.
Traceability is critical—auditors will test whether disclosures reconcile to the lease register, trial balance, and financial statements. Companies should prepare disclosure packs early, ensuring schedules are audit-ready and supported by documentation. This preparation avoids last-minute adjustments and strengthens investor and lender confidence.
6. Audit Expectations in 2025
As Canadian companies enter 2025, auditors are applying higher standards. They expect not only reconciled lease registers but also full traceability from contracts to financial statements. This means being able to walk through a contract, show how terms were interpreted, demonstrate how assumptions were applied in the model, and reconcile results to the general ledger. Audit readiness is no longer about meeting the minimum standard; it is about operationalizing the lease accounting framework so that compliance becomes sustainable year after year
7. Practical Steps for Year-End Success
To avoid year-end delays, Vancouver finance teams should:
Reconcile the lease register against procurement and legal records.
Verify contract data quality—capture all terms, options, and non-lease components.
Document model governance, including discount rate policies and remeasurement logic.
Implement clear controls—initiator, approver, and reviewer roles with evidence of oversight.
Prepare disclosure packs—maturity tables, roll-forwards, and qualitative policies.
These steps position companies for smoother audits and reduce the risk of last-minute surprises.
Why Audit Readiness Matters in Vancouver
For Lower Mainland operators, lease accounting Vancouver under IFRS 16 and ASC 842 is now a core audit focus. Strong inventory management, governance over discount rates, and reconciled ROU assets Vancouver schedules protect valuations, lender trust, and board confidence.
We set up lease registers, discount-rate governance, and disclosure packs for Vancouver-based groups (including entities with U.S. parents), so your ROU assets, lease liabilities, and maturity tables stand up to audit scrutiny.
Get our IFRS 16/ASC 842 year-end checklist tailored for Vancouver teams.
