ShareControl IFRS 16 feature
Multi-currency and group consolidation of leases in ShareControl IFRS 16
When leases are managed across companies, countries and currencies, IFRS 16 quickly becomes more than a calculation exercise. ShareControl IFRS 16 automatically handles the contract currency, the functional currency and the group’s presentation currency in the same data, and supports the foreign currency treatment of IFRS 16 items in line with IAS 21.
How it works
How multi-currency and group reporting of leases work in ShareControl IFRS 16
ShareControl IFRS 16 brings leases, the company structure, currencies, exchange rates and calculations together in one solution. Local figures can be reported separately, while the group gets one consolidated IFRS 16 basis.
1
Set up the group structure with companies, countries, currencies and reporting units.
2
Register leases in the contract currency with the relevant IFRS 16 assumptions.
3
Retrieve or register exchange rates for correct currency treatment and reporting.
4
Report IFRS 16 data at company and group level with a documented basis.
IFRS 16 currency treatment
Correct currency treatment of IFRS 16 items in ShareControl
When reporting in another currency, different exchange rates apply depending on which part of the IFRS 16 roll-forward is being translated. ShareControl IFRS 16 handles this item by item, so the opening balance, the movements in the period and the closing balance are reported on the right exchange-rate basis.
| IFRS 16 item | Currency treatment in ShareControl IFRS 16 | Explanation |
| Opening lease liability | Previous period’s closing rate | Ensures continuity with the value reported in the previous period |
| Lease payments (cash flow) | Rate for the period | Payments are translated at the exchange rate for the period |
| Interest expense | Rate for the period / average rate | The interest effect is reported at the exchange rate for the period |
| Closing lease liability | Closing rate at the reporting date | The closing lease liability is reported at the closing rate on the balance sheet date |
| Current portion of the lease liability | Closing rate at the reporting date | The current portion follows the closing rate for the lease liability |
| Right-of-use asset | Rate at the transaction date when measured at historical cost | The right-of-use asset is a non-monetary item and is therefore not retranslated for exchange-rate changes |
ShareControl IFRS 16 uses different exchange rates depending on the item being translated. The opening lease liability is based on the previous period’s closing rate, payments and interest for the period are translated at the rate for the period, and the closing lease liability and its current portion are reported at the closing rate on the balance sheet date. The right-of-use asset is treated separately and is normally measured at the rate on the transaction date when it is measured at historical cost.
Translation from a subsidiary’s functional currency into the group’s presentation currency follows separate rules. In that case, all assets and liabilities, including the right-of-use asset and the lease liability, are translated at the closing rate on the reporting date.
Lease currency
Leases in a currency other than the company’s functional currency
When the lease currency differs from the company’s functional currency, the right-of-use asset and the lease liability are treated differently.
The right-of-use asset is normally measured at the exchange rate on the transaction date and, when measured at historical cost, is not retranslated solely because of exchange-rate changes.
The lease liability is a monetary item and is translated at the closing rate on each reporting date.
Exchange differences on the lease liability are normally recognised in profit or loss.
Presentation currency
From functional currency to the group’s presentation currency
Currency translation for group reporting is a different issue from the currency treatment of an individual lease.
ShareControl IFRS 16 lets you report local IFRS 16 figures and, at the same time, translate the data into the group’s common presentation currency.
When a subsidiary has a functional currency other than the group’s presentation currency, the IFRS 16 figures are translated in line with IAS 21.
Assets and liabilities are translated at the closing rate on the reporting date.
Income and expenses are translated at the exchange rates on the transaction dates. An average rate may be used where it is a reasonable approximation.
Translation differences arising on translation into the group’s presentation currency are recognised in other comprehensive income (OCI).
Group structure
Reporting across the group structure
Group reporting starts with a clear structure. In ShareControl IFRS 16, leases can be linked to legal entities, countries, currencies and reporting levels.
Company and legal entity
Country and region
Local currency
Reporting currency
Group structure and consolidation level
Exchange rates
Retrieve exchange rates automatically or use the group’s own rates
ShareControl can retrieve exchange rates from central banks, or use the group’s own exchange rates. Which rate applies depends on which part of the IFRS 16 roll-forward or the group reporting is being translated.
Automatic retrieval from central banks
Previous period’s closing rate for the opening balance
Rate for the period or average rate for payments and income statement items
Closing rate on the reporting date for the closing lease liability
Support for the group’s own exchange rates
Contract currency
Leases in different currencies
ShareControl IFRS 16 keeps the contract currency on each lease while reporting the values in the company’s functional currency and the group’s presentation currency.
Leases in NOK, SEK, DKK, EUR, GBP and other currencies
Contract currency on each lease
Functional currency per company
Group presentation currency at report level
Traceability from group figures to the local lease
Consolidation
Automatic reporting of lease data across the group
Groups need to see both local and consolidated figures. ShareControl IFRS 16 makes it easier to report IFRS 16 per company, region or group without building separate Excel models.
Reporting per company
Reporting per region
Consolidated group reporting
Lease liabilities at group level
Right-of-use assets at group level
Shared data model and posting logic
Documentation
Trace group figures back to local leases and exchange rates through the audit trail
In an audit, reported group figures must be explainable. ShareControl IFRS 16 keeps the link between group reporting, local companies, currencies, exchange rates, leases and calculations.
Which companies are included
Which leases are included
Which currency was used
Which exchange rates were used
How the figures were calculated
Get control of IFRS 16 across companies and currencies
See how ShareControl IFRS 16 makes it easier to manage multiple currencies, exchange rates, group reporting and traceability in your lease portfolio.
