Adoption of the IFRS16 accounting standard with the SAP RE-FX solution

Challenge

The Customer has expressed the need to manage the IFRS16 accounting principle for leasing contracts relating to the following types:

Leases
Conventions
Easement
Vehicles
Gyms
Installations

The adoption approach to the principle followed the First Adoption, where part of the contracts subject to IFRS16 valuation were already present on the customer’s systems for the Real Estate part and managed within the SAP RE Flexible module, with a focus on the maintenance of information and accounting logic for existing contracts.

Solution

The management of the IFRS16 principle was implemented through the standard evaluation function of the IFRS16 leasing contracts of the SAP RE-FX module.

A dedicated Qintesi team followed the lean design approach, in which we tried to maintain the use of the functions using the standards issued by SAP, and to adapt the existing control and accounting rules on the system.

The implemented solution has allowed the customer to have, in a single platform, the unified and homogeneous management of the lease contracts subject to IFRS16 evaluation, where by management it is meant both the registry/contractual management and all the accounting operations both of cost detection and of accounting evaluation for the related IFRS16 purposes.

The accounting operations for IFRS16 have allowed the creation and evaluation of assets connected to contracts in the logic of the discounted Right of Use, the calculation of depreciation, interest rates and financial liabilities measured according to the defined discount rate. All this by integrating the SAP RE-Fx module with the SAP Finance, Controlling and Asset accounting modules.

The management of accruals and prepayments for the recording of periodic cost competencies has also been extended, for the sole purpose of local Principle.

The Data migration phase was an important part of the project, during which the existing contracts were massively integrated with the information necessary for management for IFRS16 purposes, and new contracts were loaded with the necessary accompanying information.

During the project a system patching activity was also carried out through the implementation of Notes SAP OSS in order to adapt the environment to the latest functionalities for the management of the IFRS16 functionality.

The implemented solution was also integrated with consolidated management and controlling systems external to SAP.

Results

Gestione anagrafica centralizzata e uniforme per i contratti di leasing IFRS16 in un unico sistema
Rilevamento dei dati di attivo cespiti e passività finanziarie relativi ai fini IFRS16 secondo la logica First adoption
Esecuzione massiva e automatica delle registrazioni contabili ai fini rilevamento costi (principio Local Gap) e delle rilevazioni contabili iniziali e periodiche ai fini IFRS16 (Principio IAS), ottimizzando i tempi di svolgimento delle attività da parte degli utenti

Statement

The project was particularly challenging considering the complexity of the new issue related to IFRS16. There were moments of constructive confrontation with the customer, from which we both had the opportunity to improve our know-how. Thanks to the cohesion and professionalism of the Qintesi team, which has also affected the customer team, we managed to achieve the set goals, and to increase the expertise on the topic, improving the design approach to the solution for next challenges.

Alessandro Esposito

Senior Manager - Qintesi

Statement

This project was really challenging and complex; the multiple integration between several functions, modules and areas of expertise was not trivial. Congratulations to the Qintesi team for the professionalism, competence and dedication they have put into the project.

Accounting, budget and administration customer’s users