Challenge
A major player, a leader in the home and personal care products market, with offices both in Italy and abroad, expressed the need to optimize its accounting processes by introducing a dedicated ledger aimed at IFRS accounting management with related reporting, and to take advantage of the features offered by the RE-Fx Lease and Contract Management module to digitize in SAP S/4HANA leasing contracts subject to IFRS16.
Solution
Due to its nature, the project was divided into two streams having different timelines.
The first stream involved the introduction of a new ledger to be used as an accounting and reporting environment in order to provide IFRS-specific financial statement data to the parent company.
With the second stream, the SAP RE-Fx Contract and Lease Management solution was implemented from an IFRS16 perspective, aimed at managing leasing contracts subject to the standard, structured by asset characteristics, and reporting all master, economic, accounting and management control information related to the contracts.
In concrete terms, the adoption of this functionality, allows the automatic calculation of the values required for valuation for IFRS16 purposes (RoU, NpV, amortization schedule, interest and lease clearing) and the massive execution of periodic accounting entries for all contracts and companies in scope. The accounting records were routed to the dedicated special ledger referred to in stream 1, complying with all the accounting and management control constraints, rules and parameters required by the client’s model.
In addition, the solution offered extensive reporting, both related to the contractual and master data of the leases, as well as values inherent to IFRS16 (Valuation Plan, Valuation Cash Flow, Reclassification of Short-Medium and Long-Term Debt).
Standard integration with SAP FI and CO modules was the cornerstone of the implementation and functionality of the SAP RE-Fx module, thus ensuring total compliance with the existing accounting and management control model.
At the conclusion of the project stream, the data migration of all afferent contracts under IFRS16 was performed, with the related master, accounting, management control and fee attributes.
Results
- Centralized management on integrated tool of contracts subject to IFRS16 standard, previously managed via Excel sheets
- Automatic integration with the accounting and management control model
- Coverage of all types of contracts subject to the principle and all cases covered by it
- Centralized and integrated reporting not only of calculated values but also of generated accounting documents
Quote
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