Specialized Software Solution for IFRS 16 Accounting

Lietuvių

With the growth of legal regulation, companies are forced to take care of the compatibility of their business management systems with the accounting standards, which include the lease accounting standard – IFRS 16, which entered into force at the beginning of 2019. One of the main challenges facing companies is how to implement new requirements having the same number of staff and in the same system.

Benefits for the Business

A specialized system developed for IFRS 16 creates six benefits for business. IFRS 16 Infographic - Benefits for the Business - no logo for web LP-1

IFRS 16 Solution Possibilities

The Columbus IFRS 16 system is implemented using 3 standard Microsoft module features: Financial Management – Ledger, Fixed Assets and Purchases and Amounts Payable.

The functions of the listed modules are supplemented with specific features to meet the requirements of IFRS.

Management of Contract Data Storing

Possibility to define individual lease conditions to each lease schedule;
Possibility to calculate separate schedules for each RoU Asset.

Lease Schedule Calculation Logic

Net present value calculation, based on periodical payment amount and lease period;
Periodical Payment split into principal part and interests during lease period;
Support of variety payment periods: monthly, quarterly, half year, annual;
Up-Front lease payments;
Advance payment;
Flexible payment calculation for the first and last payment period;
Fix and variable interest rates;
Contract status workflow management.

RoU Asset Management

RoU Assets management using standard Fixed Assets functionality, with its features, functionalities, reporting possibilities;
Automated Fixed Assets cards creation and schedule calculation in case of lease agreements with multiple items of lease property;
Periodical RoU Assets depreciation calculation;
Depreciation and Interests expenses allocation using RoU Asset dimensions allocation template.

Contract Amendment Management

Contract conditions (periodical payment amount, lease period, interest rate) update and schedule recalculation at any moment of lease period;
Changes history tracking;
Automated schedule recalculation after variable interest rate change.

Contract ending and termination

Automated schedule ending and RoU Asset disposal when zero balance for lease liabilities is reached;
Premature termination (early buy-out or termination) management.

Lease agreement accounting operations

Lease liabilities and RoU Asset acquisition cost posting on contract activation to General Ledger and Fixed Asset module;
Long term and short term liabilities tracking.
Automated periodical lease liabilities reduction posting, based on confirmed lease schedule;
Automated calculation of schedule amendment effect (gain/loss) and posting to General Ledger and Fixed Assets module;
Premature termination effect calculation and posing it to General Ledger and Fixed Assets module.

Reporting

Standard NAV reports for dimension analysis;
Standard Fixed Assets reporting tools.

Columbus IFRS 16 Solution View

1 Main Menu

2 Contract Card

3 Schedule Card

4 Schedule Lines

5 Schedule Statistics

Donatas Statulevičius

Compliance and Business Continuity Expert

Want to know more?

Find our solution on Microsoft AppSource

Solution helps the lessees to support and ensure lease agreements accounting according to IFRS16.

Customer experience

ATEA

"Created solution is intuitive – user friendly and allows to manage lease contract with minimum efforts".

Customer experience

Šiaulių Bankas

"Provided calculations and disclosures of new standart to the management of Bank and audit company on time"

How to adhere to IFRS 16 regulations and build a competitive advantage

Adapting your company's processes to IFRS 16 doesn't require a new business management system or an extra person - it can be done more easily with a specialized IFRS 16 module.

Benefits of a Specialized IFRS 16 Solution

Contract change management, periodic data transfer and reporting are only a few benefits for the company with a specialized IFRS 16 solution.

Benefits of a Specialized IFRS 16 Solution

Ausra Urboniene

From 1 January 2019, International Financial Reporting Standard (IFRS 16) requires lessees to account for contractual lease liabilities as non-current liabilities when the lease term is longer than twelve months and the lease price exceeds a specified period. Long-term liabilities under a lease contract are calculated and recorded as the net present value of future cash flows, discounted at the contractual discount rate. The contractual lease price is divided into two components – value coverage, which consistently reduces the registered long-term liabilities, and interest, which are accounted as expenses. All of these calculations can be done in Excel, but companies with a large number of lease contracts understand very well that such calculations in Excel and accounting at the level of each contract will be cumbersome. This requires a flexible solution that specifically meets the requirements of IFRS 16. However, is a truly specialized IFRS 16 solution relevant and applicable only to large companies? Consider the benefits of a solution developed specifically for IFRS 16 that is likely to be relevant to all those accounting for long-term lease liabilities.

IFRS16
Finance and Lease
Compliance and business continuity

How to adhere to IFRS 16 regulations and build a competitive advantage

Egidijus Plynius

Lease agreements get modified all the time; due to a change in the asset or a variation in the lease timeline and price. These modifications are nothing new; however, with the mandate of the latest IFRS 16 Lease, entities following the IFRS standard must adhere to the new accounting practices. The IFRS 16 Lease implementation is one of the most disruptive and complicated changes to the Lease standards ever. According to this, a lessee is required to recognize a Right of Use (RoU) asset to represent its right to use, and a lease liability to represent its obligation to make lease payments. The lease liability is measured at the present value of the lease payments and calculated over the lease term.

IFRS16
Finance and Lease
Compliance and business continuity

IFRS 16 Challenges for Business

Ausra Urboniene

Lietuvių IFRS 16 effective from 1 January 2019 affected all companies with long-term contractual lease obligations recording their accounts in accordance with IFRS.