From 1 January 2019, a new regulatory framework for leases (IFRS 16) will apply. The Leasing Module in Escali Financials covers these requirements. It meets both accounting and treasury department needs for a full overview of the cash flows.
Accounting for leases (IFRS 16)
From 1 January 2019, a new regulatory framework for leases (IFRS 16) applies. Businesses should have in place a system which meets the New requirements.
The main feature of the new IFRS regulations is that the distinction between operational and financial leases disappears. All leases must be included in the balance sheet statement. This means that the lease obligation is recognised as a liability (Debt) in the balance sheet, with a corresponding “Right to use” on the asset side of the balance sheet.
The value of the lease obligation under IFRS 16 is based on the present value of future cash flows. The lease amount should be divided into an interest and an installment part. The “Right to use” on the asset side should be written-down according the corresponding regulations on other fixed assets.
In principle this will mean that leases appear both in the balance sheet and the P&L account in the same way as assets funded by loans.
The disctinction between financial and operational leases continues to apply to companies that use certain other Accounting Standards.
Main features in the Leasing Module
The system automatically makes all calculations and does all the book-keeping related to IFRS 16. Escali Leasing handles the calculation and automatic accounting of depreciation, interest, installments and accruals. You can export the ledger transaction to approximately 50 different accounting systems.
With Escali Leasing you get a full overview of the agreements, full automation of calculations and book-keeping. We will cover all note requirements related to IFRS 16 through our dynamic reporting solution, Escali Reports.
In Escali Leasing it is easy to enter basic data regarding the leases. The system takes care of the rest: Calculations of present value, internal rate, depreciation, interest, installments, lease liability, "Right-to-Use" and accruals. You can change the appointments and add options. It is also possible to distinguish between front- and back-office features.
We can import the leases using our simple and flexible import interface. Escali Leasing can be used as a stand-alone application or together with other modules in Escali Financials.
We consider IFRS 16 to be an important area and have our own Expert Team. Book a demo by calling us +47 55 52 77 73.
Download our brochure here:
Escali Financials - Leasing module brochure 2019.pdf