Lease accounting in accordance with IFRS 16

2019 marks the beginning of a new era in lease accounting: the mandatory application of IFRS 16 “Leases” marks the end of off-balance sheet financing for IFRS balance sheet preparers. The major impact on key performance indicators such as EBITDA, EBIT, equity ratio and debt as well as the many new requirements for processes and systems, particularly for lessees, is forcing IFRS users to take action. With a large number of factors to consider, the transition to the new standard should not be underestimated in terms of time.

Smart software solutions facilitate the transition

Rödl & Partner is your competent partner for the introduction of IFRS 16. We combine our technical expertise in international accounting with our know-how in holistic IT consulting in a unique way. The flexible SAP RE-FX module or the smart lease accounting solution from Lucanet will help you to master the challenges of the transition to IFRS 16 and organise it efficiently. Benefit from our customisable software solutions!

The implementation of IFRS 16

A uniform company-wide master data basis, taking into account all international subsidiaries, is the indispensable basis for accounting in accordance with IFRS 16. Without the use of intelligent software solutions, the conversion and ongoing management of leases in accordance with IFRS 16 is hardly practicable for most companies. Supported by software that is in line with your IT strategy, the introduction of IFRS 16 is ideally divided into five phases:

Your typical project process (click to enlarge)

Our IT solutions

For companies with SAP applications, the use of the SAP RE-FX module is often an option. This contract management solution from SAP specifically for lease accounting includes both real estate management for real estate and lease administration for equipment and enables you to manage all contracts and conditions centrally. Integrated accounting in accordance with IFRS 16 and HGB is controlled via the contract conditions and automatically updated in the event of valuation changes, such as interest rate adjustments.

For companies without SAP applications, the Lucanet solution offers a possible solution for ensuring compliance with the accounting-specific requirements of IFRS 16. Individually customisable, you only use the modules that you need for your company.

Parallel to the technical analysis and conception as well as the development of the appropriate IT infrastructure, we recommend taking a close look at the contract management processes and optimizing them if necessary.

Your benefits beyond the transition

With the help of reliable software solutions, the transition to IFRS 16 can be organised safely and efficiently. The effects on your company's process and system landscape will be easier for you to handle and the SAP RE-FX software or the Lucanet solution will also offer you simple management of your leasing transactions in the future, on the basis of which strategic decisions can also be made more easily.