What is the best solution to ensure IFRS 16 conformity? The ideal solution must meet the following eight requirements:
The last point on running simulations is very important. This functionality will enable you to take the right decisions about the definitive financing methods you should select. In this respect, the requirements for the IFRS 16 standard go well beyond simple simulations of potential loans, assets to be entered, depreciation and loan annuities. The impact on the financial statements (income statement, balance sheet and cash flow) can be significant and must be part of a strategy. In addition, simulations will open prospects in terms of the choice of investments, financing, tax impacts, etc. All of these elements can become decisive in the investment and financing strategy of your group.
In summary, the solution you choose will have to be able to manage transactional items, perform calculations (notably financial ones), provide controls at the different steps of the process, manage high volumes, manage documents, etc.
Reporting and planning applications, which are increasingly used by Finance Departments, meet these criteria: they integrate financial intelligence functionality and already offer extensive options to ensure conformity with IFRS 16 quickly and less expensively.
Sigma Conso has developed an IFRS 16 kit in their reporting and planning application which enables you to easily manage your lease contracts and intuitively carry out all of the tasks required, including financial calculations, documentation, workflow, and item tracking from the most detailed level (the transaction) through consolidation entry. The IFRS 16 kit provides a documentation base for your consolidated entries which is automatically linked to your consolidation software, regardless of the one you use.
In addition, the Business Intelligence functionality of the tool ensures easy translation of your data into graphs, which will facilitate internal and external communication. Don’t wait any longer to anticipate this processing.
Even creating an inventory of all of the contracts in your subsidiaries can be problematic. Failing to anticipate the impacts or the information to be provided now could be dangerous.
This article was previously published on the Sigma Conso blog.