IFRS16 – adjust leasing management to new standards

Is an application that speeds up and simplifies lease management and accounting under International Financial Reporting Standards IFRS16

• It's a turnkey solution that helps organizations manage their entire lease accounting workflow, from contract creation to expiration
• Includes rules for calculating right-of-use (ROU) assets and lease liabilities, including future payments, interest and depreciation, in line with IFRS16
• Available in the cloud or on premises
• It provides convenient access to data and analysis in various sections. It allows flexible modeling of "what if" scenarios and quick reporting for all types of contracts
• Integrates IFRS16 with ERP and the process of closing, consolidating and reporting
• Supports the process of budgeting and deviation analysis

The ILA16 solution has been designed taking into account the specific rules for calculating the correct value of assets for the right to use and leasing liabilities, including future payments, interest and depreciation costs throughout the contract. The contract can be easily created by importing it from the source system or entering it manually. Intuitive three-step process begins in the IFRS16 portal.

According to the provisions of IFRS16 several types of costs can be covered by leasing. In IFRS16, accounting applies to the amount of the lease liability, any other payments made prior to the contract's inception date, direct costs incurred by the lessee in connection with entering into the contract, as well as estimated expenses related to bringing a job or place in the company to its pre-lease condition, targeted for the period after the end of the contract. Assessing the value of a leased asset as a right to use it entails additional valuation under IFRS16 accounting.

There are three valuation models here, as described in IFRS16: the cost model, the revalued value model, and the hourly value model used for investment properties. Right-of-use assets are also valued taking into account their depreciation, in accordance with the provisions of IAS 36.

When complying with IFRS16, accounting is worth addressing in a comprehensive manner, taking inventory of all leases beforehand. It may turn out that IFRS16 leases will also cover other previously unclassified contracts. Next, accounting IT systems may need to be adapted to effectively account for subsequent contracts.