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2 min Demo: IFRS 16


Learn how CCH Tagetik creates a corporate leasing data mart for IFRS 16 and other reporting requirements. From the single version of the truth, you can accurately calculate, report and disclose while minimizing risk.


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Transcript

On the move for IFRS 16: how to be compliant with no disruptions.

In the first column you can see the 'AS IS' numbers on the general ledger, then 2 columns with the impact of 15 and 16, and in the last column the adjusted numbers.

Here we see a 'Delta' for depreciation.

Let's run a drill down to analyze which contracts are causing this.

As you can see, the underlying contracts or contract portfolios, add up to the number we just saw in the P&L;, this way we can easily analyze which contracts are causing which values to change between the 'AS IS' and the 'TO BE' situation.

Next I would like to take you to the process of collecting contract information from the various entities in our organization.

As you can see different processes can be combined and configured in one application.

This process has 4 steps: data collection from the entities, the calculations to derive the necessary IFRS adjustments, reporting and release to feed the GL, with the adjustments of all the entities you can easily see where they are in the process.

Let's move to the first process, contract data collection.

Typically in this step you will load data from various sources including your GL.

Let's have a look at what type of data is collected, this time in Excel.

Here you can access all the information about the individual contracts or portfolios for this particular entity, such as contract ID, description, and so the details.

Let's look into the detailed info for the first contract of this TELCO entity: for each contract many variables can be stored, either for the calculations of the IFRS adjustments or for reporting and analysis, or descriptive, numerical and date fields, for example, here you can see that this contract has a length of 4 years and an interest rate of 4.5%.

Further down you can see there's information about assumptions, underlying assets and so forth.

In the second tab, you see more parameters, such as the details of the lease payments, either fixed or variable in time, interest rate and important options such as purchase, renewal and termination options.

Let's look at some of the other reports.

We can run reports at group or entity level, or run a report for individual lease contract.

As you can see, both the 'AS IS' and the 'TO BE' numbers are shown with the months in the columns for the duration of the contract.

We see the creation of the 'Right of Use' asset -RoU-, which was calculated using the net present value method, and the corresponding depreciation, the lease liability, the interest expense etc.

All parameters, such as the interest rate or renewal options that we saw earlier in the contract management form, are taken into account in the calculation of the correct IFRS 16 value.

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