Lease Accounting IFRS 16 ASC 842
Expert lease accounting consulting and implementation of Lease Accounting IFRS 16 ASC 842 software solutions under SAP BFC, CCH Tagetik and Anaplan
On 1 January 2019 companies are required to use the new Lease Accounting IFRS 16 standard to collect, interpret and calculate the impact of the individual contracts in their lease portfolio. The standard furthermore requires companies to assess the IFRS 16 accounting impact starting 2018, independent of electing the “Full Retrospective” or “Modified Retrospective” approach. The “Full Retrospective” approach consists in determining the cumulative effect of applying the new standard as of the beginning of the first historical period presented, and recast revenue and expenses for all prior periods presented in the year of adoption of the new standard. The “Modified Retrospective” approach consist in applying the new standard to all new contracts initiated on/after the effective date, and, for contracts which have remaining obligations as of the effective date, enter an adjustment to the opening balance of the retained earnings account.
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Implementing IFRS 16 is more complex than you may think it is. When you are about to embark on your IFRS 16 implementation journey, do keep the 8 aspects detailed in this article in mind
LEASE ACCOUNTING EXPERTISE
Satriun Group has consulted clients in the adoption of Lease Accounting standards right from the publication of the standards and has also elaborated its own IFRS 16 solution, thus building hands-on expertise on practically solving the challenges of IFRS 16.
We help our clients understand the transition from IAS 17 to IFRS 16 or simulate the impacts of the full retrospective and modified retrospective methods and take informed decisions on the choice of method. We furthermore identify particular reporting requirements that need to be taken into account when choosing the applied method (i.e. like-for-like management reporting, implications of IAS 8, etc.)
Bridging our expertise in accounting and group reporting software solutions, we are particularly skilled for identifying the impact of Lease Accounting on the group chart of accounts and adapting the consolidation solution in use (Income Statement, Balance Sheet, Movement Schedules, Cash Flow, and Disclosures are affected by Lease Accounting). We contribute in adapting general ledger systems and accounting policies at each of the group companies and delivering data integration between those ledger systems and the lease accounting solution. Finally, we can manage knowledge- and change management with regards to Lease Accounting, including updating financial manuals and delivering IFRS 16 or ASC 842 trainings to the end-users.
We extend our own consulting capacity and expertise in Lease Accounting by working in hand-in-hand on some of our projects with long-term French partner Ginini antipode. Combined teams broaden expertise and bring value-added beyond Lease Accounting taking into consideration impacts of all financial reporting and accounting standards for our clients.
HELP IN SELECTING THE RIGHT IFRS 16 or ASC 842 SOLUTION
Satriun Group assists its clients with the process of selecting the appropriate Lease Accounting IFRS 16 or ASC 842-compliant solution, including the definition of the functional and technical requirements, preparation of demo scripts, and evaluation methods.
We have developed a set of key evaluation criteria split into three categories for the evaluation of the right technology for our clients:
- Vendor and solution maturity
- Functional requirements
- Lease calculation engine
Furthermore, we help our clients identify unique lease contract use cases in order to understand the coverage of own specificities by the software solutions under evaluation. Examples of use cases may include: base case, renewal options at inception of lease, early termination, lease with indexation and rent free period, reassessment of lease term, reassessment of lease payment, subleases modifications, purchase options, dismantling costs or transition phase IAS17 – IFRS 16.
ENSURING BEST PRACTIVES IN IMPLEMENTING LEASE ACCOUNTING SOLUTIONS
Our extensive understanding of the Lease Accounting IFRS 16 challenges and software solutions specificities allows us to act as a valuable Manager of the project and its deliverables, including the definition of timelines, milestones, project organization, training strategy, issuance of newsletters and other change management activities.
When the choice of the Lease Accounting solution goes towards a solution edited by a Corporate Performance Management (CPM) software vendor such as SAP, CCH Tagetik and Anaplan, our software solution experts help our clients install, integrate and customise the solutions to the particular needs of each client. We apply our standard CPM solution delivery methodology that safeguards on-budget, on-time and on-expectations implementation projects.
SATRIUN GROUP LEASE ACCOUNTING IFRS 16 SOLUTION BASED ON SAP BFC
If you run SAP BusinessObjects Financial Consolidation (BFC) and look for rapidly implementing a complete IFRS 16 solution able to manage lease contracts, ensure data coherence, perform IFRS 16-related calculations and reporting, Satriun Group has developed a complete solution that covers lease contracts management, many validation controls, calculations, reporting and minimises acquisition, installation, deployment, training and maintenance costs. Our solution installs directly in your SAP BFC environment, connecting to your existing group consolidation application to inherit entity structures, chart of account and user security.
Our Lease Accounting UFRS 16 solution allows you to leverage your existing investment and knowledge of SAP BFC by implementing a complete IFRS 16 solution within weeks with a one-time acquisition costs, no additional SAP licenses, no maintenance fee and a technology already known by your users. It offers a full pre-configured IFRS 16 functionality, possibility to integrate additional custom needs and content and an integration with your ERPs or your existing SAP IFRS consolidation solution. The solution perfectly supports simulations necessary for choosing between the full retrospective and modified retrospective methods under IFRS 16.