Lease accounting is changing on a global basis and will affect 1 in 2 companies. As of January 1st 2019 for IFRS 16 ‘Leases’ and December 15th 2018 for FASB ASC 842, the majority of leases will need to be capitalised as assets and liabilities on fiscal balance sheets as part of a global effort to provide more accurate financial reports.

IFRS 16 at a Glance

Dashboard – A Top-Level Overview of Your Portfolio, at a Glance.

The LOIS user dashboard provides you with a consolidated overview of all the active leases within your organisation.

Use this information to:

  • Present the initial scope of the project
  • See how active leases are distributed globally
  • Recognise leases that require immediate attention
  • View and analyse data dependent on the selected search criteria set by the user

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Adding a Lease Couldn’t Be Simpler.

Upload your lease data with ease. Ensure all your critical lease information is centralised in one place.

  • Add leases to the system using New Lease API, integrated upload tool or manual input
  • Regular and Irregular profiles (multiple rentals with different periodicities)
  • Reporting using IRR or IBR
  • Multi-asset addition
  • Document storage
  • Ability to save mid input as Draft Lease or confirm to Activate a lease
  • Edit Add Lease inputs pre-activation

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Intuitive In-Life Changes.

All in-life lease amendments are catered for, adhering to the IFRS 16 and FASB ASC 842 standards covering:

  • Full extensions
  • Part terminations
  • Full early terminations
  • Consideration changes
  • Indexation price changes (IFRS)
  • Rental corrections and impairments

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Simple to Use Accounting Reports.

Run multiple lease accounting reports for numerous accounting standards (IAS 17, IFRS 16 and FASB ASC 842). Instantly see how your critical performance metrics change under each standard.

  • IFRS 16 accounting report showing asset, liability, future rentals and disclosure summaries
  • IFRS 16 journals
  • IAS17 vs IFRS16 showing the difference in reporting outputs based on the reporting rates of the leases held in the system
  • FASB ASC 842 accounting report showing asset, liability, future rentals and disclosure summaries
  • FASB ASC 842 journals

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Lease Accounting Summary

The summary report provides users with a detailed overview of the changes to financial statements and extracts the right of use (R-O-U) asset and liability movements under IFRS 16 with the associated income statement and cash flow movements. The lease rentals are spread across the required time buckets to enable the lease disclosure notes to be completed.

The FASB version of the accounting summary contains the same information as the IFRS 16 report above but splits the outputs into Finance and Operating leases.

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Running Amortisation and Depreciation schedules couldn’t be simpler

At the commencement of a lease, LOIS generates an asset and amortisation schedule based on the financial information input into the system. With each modification to the lease, a new amortisation and asset schedule is created and stored to allow retrospective reporting based on the schedules in play at that time. These schedules drive the accounting outputs.

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Journal Entries made easy

Journals are created in the system for both IFRS 16 and FASB ASC 842 accounting entries. LOIS has it’s own generic general ledger codes associated with each event in a lease’s life. These codes can be mapped to the user’s general ledger codes. Journals can be exported to Excel for upload to the general ledger or avail of the GL API to remit the journals to the user’s general ledger in an automated fashion.

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Access a Full Suite of Standard Reports.

LOIS’s full suite of standard reports provides you with all the tools required to help ensure a successful transition to either IFRS 16 or FASB ASC 842. Track your progress from beginning to end.

  • Forecasting reports i.e. future portfolio run off reports:
    • Rentals obligations report
    • Capital outstanding report
    • Interest outstanding report
    • Outstanding liabilities not capitalised
  • Movements between defined date parameters:
    • Capital paid
    • Interest paid
  • Supplementary accounting disclosure reports:
    • R-O-U asset by asset category
    • Disclosures by asset category

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The Solution

Innervision’s lease accounting software, LOIS, is the most cost-effective way for companies to manage their lease portfolios and transition to the new accounting standards.

The solution is a hassle-free lease accounting software that delivers all the transition tools and functionality needed to extract, validate and report on all the critical lease data required for full compliance with both IFRS 16 and ASC 842. By loading your lease information onto LOIS, you’re easily able to evaluate your entire portfolio and identify what leases are impacted by the new standards.

Companies that use LOIS to manage and enhance their lease portfolio are able to produce all the accounting information required to accurately complete the financial statements obligatory for compliance; including income statement, cash flow and balance sheet. LOIS will also generate the complex calculations for you with ease.

“Companies have thousands of leases and they will have to go through them lease by lease.”
Veronica Poole, Deloitte UK’s national head of accounting

With the need to produce comparative retroactive reports for financial years before the effective date and the time required to collate and identify all your active leases and obligations, the deadline to get ahead is fast approaching and “The Big 4” accounting firms are advising that lessees need to begin making preparations immediately. Innervision provides a solution that is both cost-effective and efficient.

“The potential impact on business is huge and is likely to affect important key performance indicators significantly.”
Veronica Poole

We’ve met with world leading accounting firms to ensure that our solution is the best available and ensures full compliance with the new standards. With LOIS, businesses are able to run the required comparative P&L and balance sheet reports for the years prior to implementation as well as providing all the data and information needed for efficient long term lease portfolio management. Innervision’s lease accounting software is a built for purpose application that allows you to run reports for both internal lease management and external compliance obligations, covering current and new lease accounting rules for businesses under IASB or FASB jurisdiction.

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Some of the clients we work with

Overview Of The New Standards

The new lease accounting standards, IFRS 16 Leases and FASB ASC 842 will have a significant impact on the way leases are recognised on financial statements as companies will now be required to account for the majority of leases ‘on balance sheet’ and recognising a right of use asset and a lease liability arising from the agreement.

The official effective date for the new accounting guidelines is for accounting periods beginning on or after 1st January 2019.

In order to meet the transition requirements and implementation deadlines, companies will first have to collate and centralise their entire lease portfolio so they are able to apply the new accounting treatments to every active lease within their organisation. A project of this scope will be extremely time and resource intensive and one that will require the adoption of specialised lease accounting software, a clearly defined strategy and efficient lease management processes to help ensure a seamless transition.

We believe that this new standard is important because it will provide investors, lenders and other users of financial statements a more accurate picture of the long-term financial obligations of the companies to which they provide capital

Russell G. Golden, FASB Chairman

With an estimated US$2.8 trillion worth of assets being accounted off balance sheet to be added and 1 in every 2 listed companies affected, this is one of the biggest changes in lease accounting to date.

Free Complimentary eBook

For a complete, comprehensive overview of the changes to global lease accounting and advice from experienced experts in how best to manage the transition, download our free guide to lease accounting compliance.

Download your copy here