IFRS 16 Leasing Software
Avia Software Limited specialises in software that will not only satisfy the requirements of IFRS 16 but also provides a web based accounting management solution for total fixed asset accounting, management and control.
Many of today's lease-related IT systems are designed primarily to assist with lease administration. They are often focused on real estate leasing or a lessor's investment in leased assets. Lessees commonly use spreadsheets to supplement requirements for current lease accounting and reporting because today's lease-related IT systems often lack the capabilities to perform the calculations required for accounting.
To satisfy the new IFRS 16 financial statement presentation and disclosure requirements, companies will need to evaluate whether to update their existing systems or to implement a new IFRS lease accounting software module. To cross reference assets held under a lease with physical assets held on the asset register it might also be worth considering replacement of other asset related modules controlled by finance and even engineering.
For most lessees, the new IFRS 16 standard will result in a gross-up of the balance sheet. Organisations should analyse existing finance and operating leases and assess the potential impact on their financial statements and metrics whilst evaluating how this might affect the way stakeholders view their financial position and performance. IFRS 16 lease software with forecasting capabilities should be capable of calculating this impact.
Adoption of IFRS 16 will result in additional tax related considerations. These include understanding the impact of the lease accounting changes on existing tax positions, initial adjustments to deferred taxes and tracking book/tax differences. Companies will need to determine necessary changes to tax-related processes and the controls required to identify and track tax adjustments. IFRS lease asset accounting software can go a long way to assisting this process.