IFRS 16 is approaching fast. In the meantime, we are left with many questions. Some organisations will need to re-examine thousands of pages of lease contracts to meet the new standard. How can this be done in a timely and efficient way while still maintaining the high quality of your data?
In April, we hosted an IFRS 16 webinar together with our partner CCH Tagetik to demonstrate their Lease Accounting Solution. During the question & answers session, some concerns were raised which we think are worth sharing. Let this help you in your own process towards getting compliant.
How flexible is the posting journal generated from your solution?
In the starter kit, we deliver a predefined format for the posting journals on a very granular level, e.g., Contract level. However, we recognise that every company has unique needs. Therefore you can customise the posting journal to a more aggregated level.
What about contract changes coming from interface? Does CCH Tagetik recognise the changes in the data fields?
Yes! CCH Tagetik recognises the changes and automatically creates a modification entry.
What level of detail is visible on different types of leasing?
In our Lease Accounting solution, you can identify Asset Class, e.g., land and buildings, and vehicles. On each contract, you can also identify additional details such as Contract Elements e.g. rent, service.
How does the solution handle contract changes?
In CCH Tagetik’s Lease Account Solution, you can track changes over time. A renewal option may change from “not reasonably certain” to “reasonably certain,” and the impact on the RoU Assets is immediately calculated.
What are the options for centralised and decentralised handling?
In the Lease Account solution, a centralised lease contract repository is created for the IFRS 16 calculations. However, the maintenance of the lease contracts can follow a decentralised approach, which means that each entity is responsible for their contracts.
What about integration (both input & result as output)?
As a part of the Lease Accounting solution starter kit, an input format file is provided including all mandatory and a number of optional fields. You are also able to manually enter data using data entry forms. At the end of the IFRS 16 calculation process, one can run a posting journal which can be uploaded to system of choice, ERP or financial consolidation, which is used in the closing process that follows.
About the experts
Manager Services CCH Tagetik Nordic
Lars-Arvid has 20+ years of experience of implementing processes, data models and system solutions within CPM. He has extensive experience of customer projects in various industries.
Lars Roar Johansen
Commercial Manager at inlumi
Lars Roar is an analytical business controller, advisor and project manager with experience from various industries such as oil, paper, IT and facility services. He combines technical knowledge of EPM- and BI-tools with solid understanding of business processes and challenges. He is a pro-active consultant with a focus on delivering durable solutions with high business value.
Would you like to know more about how CCH Tagetik can help you get compliant before January 2019? Download this brochure for a simple overview of the Lease Accounting Solution: