Implementing SAP Real Estate and IFRS 16

IFRS 16 replaces the previous standard IAS 17 and will become mandatory from 2019 Financial year, 1st January 2019. The implication of this new standard requires that most leases must be reported on the company’s balance sheet. Operating leases were charged to the Profit and Loss however will now be required to report on balance sheet as RoU assets which in turn has impacts on the operating profit, EBIT & EBITDA. The new standard sets out the principle for recording and calculating the RoU asset for presenting and disclosure of the lease.

While companies continue to use spreadsheets or other solutions, information silos exist between the lease managers and accounting teams. Data becomes confusing, calculations are highly inaccurate especially with the many various changes a lease undertakes during its contractual term. This all results in misleading and incorrect financial statements, regulatory non-compliance and audit findings. The IFRS 16 standard has forced a new way of looking at lease accounting, it has been thrusted upon organizations creating a much greater complexity in business and system processes.

SAP has worked tirelessly with the IRFS Board to transform the existing SAP RE-FX (Flexible Real Estate Management) module to support the regulatory compliance of the new accounting standard. The solution is robust and easy to use providing a ‘single point of entry’ for lease managers and asset accounting teams to work seamlessly in managing the various aspects of the ongoing lease management activities (renewal options, terminations, sales rent, rent increases and decreases) as well performing the calculations to generate the financial journals which are integrated into SAP Financials. There is no other software that perform as standard this integration. Complex and expensive interfaces are what you want to steer clear of.

Improve your decision making and make the visibility into your leasing portfolio another feather in your SAP solution. Real SAP Consulting are experts in this field and its consultants have the knowledge and experience plus a proven track record for implementing the solution and giving you an outcome that you want and need.

Red Lounge Consulting was founded on a single mission: to deliver affordable and quality SAP Real Estate RE-FX IFRS 16 projects to the market. They are a low cost consultancy with limited overheads. Whom can deliver your project remotely while coming on site for key project deliverables. They have developed the set of tools ready to deliver your SAP IFRS 16 requirements. There is no need to ’re-inventing the wheel' and pay for expensive project deliverables. Red Lounge Consulting have the experience and expertise to guide you through to the outcome you need. Drop them an email to set up a time to chat.

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