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IFRS16 Leased Asset Management
Leave behind Excel-based leased
asset management
with quick one-month implementation
to realize globally integrated management
Hold both local and IFRS standards and
automatically output consolidated
adjustment entries/consolidated notes
IFRS16 Leased Asset Management
Outline and Key Points
Explanation by Business Brain Showa-Ota Inc. Taisuke Inoue
-
1
Basic accounting -
2
Keeping 2 ledgers and optimizing entry -
3
Automatic output of entries -
4
Local currency-based entry/management of ledgers
What is IFRS16?
IFRS16 Requirements
The IASB (International Accounting Standards Board) announced a new standard of lease accounting, IFRS16 “Leases,” in January 2016. IFRS16 is effective for fiscal years starting in or after January 2019, and from the fiscal year ending in March 2020 for companies with fiscal years ending in March.
Instead of on-balance processing (capitalization) for all lease contracts, off-balance processing (expense) will be necessary depending on the lease amount and lease period,
When applicable for on-balance processing, contract, right-of-use assets, and lease obligations must be recorded; however, lease obligations require recording with the discounted present value of the total lease expense, and right-of-use assets require recording also with the amount including initial cost.
Regarding right-of-use assets, for depreciation and lease obligations, interest expenses and lease obligation repayment must be recorded every month. Compared to conventional operating lease management, this requires an immense amount of effort; thus, efficient operation utilizing a system is desired.
Journalization Example
Lease period: 5 years, Amount of payment: 200,000 (once per month), Discount rate: 5%
Conventional Lease Accounting
Monthly
| Debit | Credit |
|---|---|
|
Rental Expense200,000
|
Bank Account200,000
|
New Lease Accounting Standard IFRS16
Contract
| Debit | Credit |
|---|---|
|
Right-Of-Use Asset10,598,140
|
Lease Obligation10,598,140
|
Monthly
| Debit | Credit |
|---|---|
|
Lease Obligation155,841
Interest Expense44,159
|
Bank Account200,000
|
Depreciation
| Debit | Credit |
|---|---|
|
Depreciation176,636
|
Right-Of-Use Asset176,636
|
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IFRS16 Leased Asset Management
Features
Feature1
Low cost and quick implementation
- Available at a low cost, starting from 40,000 yen per month (including 10,000 yen maintenance fee). Please contact us for details.
- Begin operation in 2 weeks at earliest. Please request an estimation for implementation support services.
*Should you wish to learn more about the implementation process or have any questions, please contact us.
Feature2
Multiple account ledger (local standard, IFRS standard) support
- Local overseas subsidiaries can manage information with loan processing and interest-inclusive method processing in local standards. For consolidated, information can be managed with sales processing (principle method) in IFRS standards.
Feature3
Automatic calculation and judgement features
- Hold minimum standard amounts and short-term lease maximum-months periods for each company, and automatically judge short-term, small-amount, and ordinary assets.
- Automatically calculate initially recorded right-of-use asset amounts, monthly lease debt repayment amounts, and interest expenses.
Feature4
Consolidated adjustment entry feature and consolidated notes features supporting IFRS application for consolidated only
- In addition to a single journal entry feature to multibook’s accounting feature, we also provide consolidated adjustment entry and consolidated notes output features for consolidated-only IFRS application.
Feature5
Available for use abroad
- Supports 12 languages*
*Japanese, English, Thai, Vietnamese, Burmese, German, French, Spanish, Chinese (Traditional) (Simplified), Indonesian
Taisuke Inoue
BUSINESS BRAIN SHOWA・OTA INC.
Accounting/Consulting Headquarters CPA Division
Manager Certified Public Accountant
After graduating from college, Taisuke engaged in sales at a communications equipment manufacturer. Later, he engaged in auditing of various businesses, including manufacturing, retail, food manufacturing, and information technology at a major auditing firm. After leaving the auditing firm, Taisuke experienced accounting in manufacturing before assuming his current post. At Business Brain Ota-Showa, he has engaged in various projects, including general IT control implementation for an IPO preparing company, implementation of a new revenue recognition accounting standard, and handling an electronic account book preservation method.