How are you adjusting comps for Operating Leases? (IFRS-16)
Wondering how different banks/groups are dealing with the Op. Lease accounting rule changes, especially when spreading comps. Is your group starting to use EV/EBITDAR instead of EBIT and EBITDA multiples? Are you going through every comparable company's financials to dig up and adjust for the lease interest and lease depreciation expenses?
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Interested as well. Running comps is now taking x2 more time.
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Latest guidance from CapIQ:
CapIQ adds op leases to debt and adjusts EBITDA by the net rental expense amount or depreciation on ROU assets
Consequently, EBITDA used in multiples like TEV/EBITDA is lease adjusted EBITDA, which is adjusted for differences in reporting
So basically CapIQ numbers = EBITDAR or some random number that only partially reflects the lease expense.
Whilst CIQ is able to do this for historical numbers - I often find that the broker still reports on a pre-IFRS16 basis (I.e. you get a different methodology for historicals pulled from CIQ, and forecasts pulled from brokers). Comps now seem to take 5x as long trying to figure out which broker has done what and how that compares to historicals on CIQ. Anyone found a suitable way forward?
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