IFRS16

The IFRS 16 standard

International Accounting Standards Board (IASB) announced IFRS 16 Lease Accounting standard and started a new era in how to handle the accounting of lease agreements. The standard is set to take effect on fiscal years starting on 1.1.2019 and after. According to new standard, practically all leases are to be shown on balance sheet (except if minor in value or duration), when in previous IAS 17 lessee had to divide lease contracts into financial (balance sheet) and operational (off balance sheet) leases.

The new IFRS 16 standard’s biggest impact is on balance sheet and on key figures derived from it. IFRS 16 also has effects on income statement as interest expenses and depreciation of the Right of Use assets must be shown. This means that compared to IAS 17, costs relative to leases are more front loaded during the time of the lease than previously. Also, EBIT and EBITDA will increase (with IFRS 16 standard) on companies which have lots of operational leases (by IAS17 definition).

The Tagetik IFRS 16 solution

With Tagetik IFRS 16 Lease Accounting solution, you can comply with the new IFRS 16 standard. The CCH Tagetik IFRS 16 Lease Accounting offers automated solution, which lets you manage large amounts of data and its gathering, calculations and creation of reports and statements with ease.

CCH Tagetik offers a number of solutions to meet regulatory requirements of:
IFRS 9, return on sales from customer contracts (IFRS 15), leasing calculations (IFRS 16) and IFRS 17. The solutions are functionally identical whether they are delivered on-premises or from the cloud.

CCH Tagetik IFRS 16 solution includes features like:

IFRS 16 calculation engine

CCH Tagetik gets you to your goal on your way to IFRS 16 compliant by using predefined data model and lease accounting calculation logics. With CCH Tagetik you can either input and or import lease contract data including contract info, asset details, fixed and variable lease parameters into the system. All lease exemptions are shown in one view to make comparisons and adjustments possible during transition period. Graphical user interface allows you to inspect assets, liabilities, expenses, depreciation and interest expenses to examine the impact on balance sheet and P&L in different scenarios e.g. full amount IFRS 16 and Delta bookings for ‘as-is’ and ‘to-be’ analysis.

CCH Tagetik solution creates a lease data mart for IFRS 16 and other reporting requirements. Using CCH Tagetik unified solution, you can calculate, report and reveal possible risks and minimize their impact on your business operations. CCH Tagetik integrates seamlessly with Microsoft BI and Qlik Sense solutions, so you can easily analyse and drill down to the lowest level of data. When you trust that the numbers are accurate, you can use more of your valuable time on analysis and planning, how to develop your business even further.

If your organization is searching for a lease accounting solution, CCH Tagetik IFRS 16 solution is for you.

Lease data mart

Ready-to-use Preconfigured Solution

CCH Tagetik IFRS 16 solution comes with Ready-to-Use IFRS 16 compliant data model. Solution includes predefined calculation models, workflow and modelling tools so that you can expand and govern the library of lease data models. Maintain contract models for lease types (land, vehicles, computer etc.). Calculate RoU assets and liabilities for present value of its future payments. CCH Tagetik IFRS 16 solution calculates a depreciation charge for lease assets and interest expenses on lease liabilities.
CCH Tagetik IFRS solutions do not interfere with other existing architectures, instead they can be integrated in all your systems e.g. CCH Tagetik CPM solutions and solutions from other vendors, whether solutions are cloud or on-premise based. With CCH Tagetik ETL features you are able to integrate seamlessly with any other data source you want data to be imported from or exported to.

Integrability

Modelling and calculation engine

With the power of CCH Tagetik’s calculation and analytics engine you process and calculate vast amounts fast. Flexible modelling helps you to ease the process of defining calculation logics and rules and remain compliant to IFRS standards.
With CCH Tagetik’s unified solution and Collaboration Office tools, organization has all the tools it needs to create and publish statements required by IFRS 16. Whether you present your statements to CFO and company board in PDF or MS Word format or give a PowerPoint presentation or a submission to regulators, you can remain confident that the figures and narratives are correct and auditable.

Disclosure and reporting