Embarking on the Complex Journey of IFRS 16 Compliance
Navigating the intricacies of IFRS 16 implementation can be a challenging endeavour, especially for those who initially relied on Excel or struggled with inadequate software solutions. This blog post sheds light on the practical steps and insights necessary for a successful transition to IFRS 16 compliance.
IFRS 16: A Holistic Challenge
IFRS 16 isn’t merely an accounting issue; it necessitates a holistic reevaluation of how lease agreements are managed and reported. Collaboration across various departments, including IT, Treasury, Tax, and Investor Relations, becomes imperative due to its profound impact.
Challenges in System Change
Transitioning to a new system for IFRS 16 compliance is often a time-consuming process, however, unlike many organisations interviewed for KPMG’s ‘Global Lease Accounting Survey’ who saw projects extending up to one year, with CCH Tagetik this doesn’t have to be the case!
Industry professionals like Simon Nardecchia, Michele O’Mara, and Simon Howell share their experiences with IFRS 16 implementation. Simon Nardecchia lauds their IFRS 16 solution’s seamless integration with existing SAP systems. Michele O’Mara highlights the challenge of finding software capable of handling multiple currencies and charts of accounts, ultimately selecting CCH Tagetik for its comprehensive capabilities. Simon Howell emphasises CCH Tagetik’s effectiveness in managing thousands of leases consistently on a global scale.
Practical Steps to IFRS 16 Implementation
In all likelihood you have your IFRS 16 data in Excel or another leasing accounting solution. If not and you are starting your IFRS 16 journey form a Project Management Team: Assemble a dedicated team for effective project management.
Assess Impact and Quantify Changes: Review lease contracts and assess the capacity of current systems to capture required IFRS 16 data.
Data Preparation: Gather, validate, and establish rates for lease data.
Select and Implement a Solution: Choose a robust solution like CCH Tagetik, known for its accounting engine and reporting capabilities.
Prepare Full IFRS 16 Compliant Disclosure: Ensure accurate and comprehensive disclosure.
Automate and Establish Regular Processes: Implement ongoing lease management under IFRS 16.
The CCH Tagetik Solution for IFRS 16 & ASC 842
CCH Tagetik, a financial and regulatory reporting tool tailored for lease management, provides integration with existing systems and a wide range of functionalities essential for finance, auditability, workflow, and process management. This solution is recognised for its low-risk profile and high value, combining traditional expertise with modern technology.
CCH Tagetik’s Comprehensive Approach
CCH Tagetik offers a swift impact assessment of IFRS and comprehends its effects on financial statements. It enables simulations of different transition methods and rates, supporting both on-premise and cloud deployment without the need for application rebuilds or migrations.
Choosing the Right Solution
As businesses continue to tackle the complexities of IFRS 16, selecting an effective solution becomes paramount for compliance and operational efficiency. CCH Tagetik is a proven comprehensive and adaptable tool, capable of addressing the diverse challenges posed by this standard. The experiences shared by industry experts underscore the significance of choosing a system that not only ensures compliance but also enhances overall financial management.
Partnering with AIS Consulting
If you’re spending too many hours in Excel, if your Auditors consider your current process for managing IFRS 16 high risk or if you are embarking on this journey, partnering with a knowledgeable and experienced team like AIS Consulting is crucial. Our experts offer guidance and support to navigate the nuances of IFRS 16, ensuring effective CCH Tagetik implementation and maximising the benefits of this advanced financial tool.
We encourage readers to reach out to AIS Consulting for further information on IFRS 16 and the benefits of implementing the award winning CCH Tagetik solution. Our team is poised to help streamline this transition and optimise your lease accounting processes.