IFRS 16 compliance is a complex and resource-intensive task for finance departments, with challenges arising both from the complexity of the standard and from the practical problems of implementation. IFRS 16 requires detailed handling of leases, accurate calculations and extensive financial reporting. Automating IFRS 16 processes gives organisations better financial control and insight.
Automating IFRS 16 processes means using dedicated software to collect leases and to calculate and post them as right-of-use assets and lease liabilities in the balance sheet.
In this article, we go through the complete IFRS 16 process and show how modern software such as ShareControl IFRS 16 can automate and streamline each step – from data collection to year-end closing.
Benefits of automating IFRS 16 processes
Automating IFRS 16 processes brings significant benefits to financial processes and increases the value of integrated data in the business.
IFRS 16 has changed the way companies handle leases. The standard requires accurate accounting, extensive documentation and continuous follow-up of contracts. For many companies, this means a time-consuming and risky process, especially when leases are managed manually in Excel spreadsheets or in systems that are hard to navigate.
Process automation can deliver significant benefits and cost savings in lease administration, and IFRS 16 software can reduce the cost of administering leases by automating calculations and journal entries.
The key benefits of automating IFRS 16
| Who | Benefits |
|---|---|
| For employees responsible for contracts | Centralised contract management: All contracts, appendices and documents are kept in one place in a central management system, so you can easily find and access all lease documents. You no longer spend time looking for files in different places or asking colleagues. Automatic reminders: The system sends notifications about key dates such as renewals, terminations and renegotiations, so you never miss a deadline. Up-to-date documents: You always work with the latest version of contracts and appendices, which removes any doubt about which file is correct. Easy handover: If you change role or leave the company, a colleague can quickly take over your tasks without having to look for missing documents. |
| For management and the accounting department | Full document overview: All contract documents are available and up to date, which ensures correct reconciliation and IFRS 16 reporting. Lower risk of errors: Automatic calculations and validations reduce human error in the accounts and ensure compliance. Effective renegotiation: Quick access to contract data and history makes it easy to prepare renegotiations and assess bonuses and penalties. Time savings: Employees spend less time looking for documents and can focus on value-adding tasks instead. |
| For the business as a whole | Better supplier and customer compliance: The system makes it easy to follow up whether the parties comply with the contract terms, and to identify any shortcomings or bonus opportunities. Less dependence on individuals: Knowledge and documents are not tied to individual employees but available to the whole team. Better basis for decisions: Management gets quick access to accurate contract data, which supports better strategic decisions. Multi-currency: Handles leases in several currencies and converts automatically to the presentation currency, which suits international companies. Integration with finance systems: An accounting journal in a format adapted to existing accounting and consolidation systems such as SAP, Visma and Agresso. Direct integration can be set up as an add-on on request. IFRS 16 for groups: Subsites can be used for separate instances (for example the parent company and subsidiaries) and ensure efficient reconciliation and common accounting policies across the companies in the group. |
Overview: good practice for IFRS 16 processes
To understand the scope for automation, we first need to look at the complete process under IFRS 16. The process can be divided into six main areas:
- Lease Portfolio Management – setting up and onboarding leases
- Lease Operations – day-to-day operation and maintenance
- Calculation & Valuation – calculations and measurement
- Reporting & Disclosure – period reporting and year-end closing
- Compliance & Controls – governance and audit
- Analytics & Optimization – continuous improvement
When the accounting functions for leases are brought together in one central IFRS 16 software, the process becomes simpler for the finance team.
Let us look at each sub-process and at how automation makes a difference.
1. Lease Portfolio Management: from chaos to control
The challenge
The first and often most time-consuming task is to collect all leases from across the organisation. Leases are spread across departments, systems, folders and paper archives. Data has to be extracted manually from PDFs and documents, and the quality varies enormously.
Automation with ShareControl IFRS 16
Data import: To comply with IFRS 16, a company needs a complete overview of all its leases. ShareControl IFRS 16 provides:
- A central repository in SharePoint where all leases can be uploaded and stored
- Structured data collection through standardised templates
- Bulk import of existing lease data
- Organisation in document libraries with metadata
Identification and classification: Under IFRS 16, all leases must be identified and classified correctly. The solution offers:
- Structured workflows that guide the user through the assessment
- Built-in classification fields (within the scope of IFRS 16, short-term lease, low-value asset)
- Documentation of the basis for the assessment directly in the system
- Version history that tracks all decisions
Initial measurement and recognition: IFRS 16 requires the lease liability and the right-of-use asset to be measured at the commencement date (IFRS 16.23–26). The software provides:
- Standardised input fields for:
- Lease term and extension and termination options
- Lease payments (fixed, and variable payments that depend on an index or a rate)
- Discount rate (interest rate implicit in the lease or incremental borrowing rate)
- Initial direct costs
- Calculation of the initial lease liability and right-of-use asset
- Integration with a model for complex scenarios
Effect: Reduces onboarding time considerably and ensures consistent data quality across the whole lease portfolio.
2. Lease Operations: automate the ongoing updates
The challenge
Once the lease portfolio is in place, ongoing operation begins. This includes monthly depreciation, interest expense, recording of payments and handling of contract changes. In manual systems, this means hundreds of updates every month.
Automation with ShareControl IFRS 16
Periodic accounting: With monthly reporting, IFRS 16 affects profit or loss and the balance sheet every month. The solution provides:
- Correct depreciation of right-of-use assets every month
- Interest expense on lease liabilities
- Automatic balance sheet updates
- Generation of journal entries for the general ledger
- Automation of accounting transactions, including present value calculations, depreciation and interest expense
- Automatic calculation of the present value of future lease payments
Payments:
- Recording of lease payments directly in the system
- Allocation between principal and interest
- Handling of variable payments
- Reconciliation with payment schedules
Lease changes: Changes to a lease must be handled quickly. The software provides:
- A structured workflow for recording contract changes
- Recalculation on lease modifications and reassessments
- A version log that documents all changes (who, when, what)
- The option to roll back to earlier versions
- Notifications of key dates and deadlines
Contract lifecycle:
- Reminders of renewals, notice periods and other key dates
- Integration with the notification module (Power Automate)
- A dashboard showing all active leases and their status
Effect: Saves the finance department several days every month and removes the risk of missed updates or errors.
3. Calculation & Valuation: accurate calculations every time
The challenge
The processes under IFRS 16 are complex. Present value calculations, depreciation, interest expense and impairment reviews (IAS 36, see IFRS 16.33) – all of it must be done accurately and consistently. This is one of the biggest challenges for companies.
Automation with ShareControl IFRS 16
Calculation engine: ShareControl IFRS 16 uses a calculation model that:
- Retrieves all lease data from SharePoint
- Calculates the present value using the correct discount rate
- Generates complete depreciation schedules
- Calculates interest expense over the whole lease term
- Generates cash flow forecasts
The auditor must be able to verify the calculations, so the process has to be transparent. The solution ensures this through:
- All calculations run centrally with the same model
- No different versions of formulas
- An audit trail from input to result
- All users work with the same data
Reassessment and remeasurement: The standard requires the lease liability to be remeasured when the lease payments change, for example on indexation or a new assessment of options (IFRS 16.39–43). The software provides:
- A systematic reassessment process
- Handling of indexation when the cash flows change (IFRS 16.42(b))
- Recalculation when trigger events occur
Effect: Eliminates errors from manual processes and ensures that everything complies with the requirements of IFRS 16.
4. Reporting & Disclosure: from data to insight
The challenge
Quarter-end and year-end closing require extensive reporting under IFRS 16. Lease overviews, balance sheet reports, profit or loss effects, maturity analyses and notes – all of it must be produced quickly and accurately.
Automation with ShareControl IFRS 16
Management reporting: IFRS 16 significantly increases the need for information. The solution provides:
- Lease overviews (all active leases)
- Balance sheet reports (right-of-use assets and lease liabilities) updated in real time
- Profit or loss reports (depreciation and interest expense)
- Cash flow reports
- Maturity analysis of lease liabilities (IFRS 16.58) for the next five years and beyond
- Interactive dashboards with key figures
Search and filtering: The solution gives you better control of your leases:
- Search across all SharePoint libraries
- Advanced filters (type, department, amount, expiry date, etc.)
- Custom views that can be saved and shared
- Export for further analysis
Statutory reporting: IFRS 16 sets extensive disclosure requirements (IFRS 16.51–60). The software supports:
- Templates for notes to the financial statements:
- Note on accounting policies applied
- Right-of-use assets and depreciation by class of underlying asset
- Maturity analysis of lease liabilities
- Information on significant leases
- Sensitivity analyses
- Generation of note tables
- Documentation ready for the external audit
Output for different recipients:
- Accounting department: an accounting journal for upload to the ERP system (SAP, Visma, Agresso and others)
- Management: executive dashboards with Power BI integration
- External audit: complete documentation with traceability
- Authorities: notes to the financial statements in the correct format
Effect: Reduces the time spent on reporting significantly and ensures consistency across all reports and systems.
5. Compliance & Controls: security and traceability
The challenge
IFRS 16 compliance requires good documentation, and auditors expect access control and an audit trail. In manual systems, it is hard to establish who changed what and when, and internal control is a challenge. Dedicated IFRS 16 software can reduce manual errors and give a better audit trail for leases.
Automation with ShareControl IFRS 16
Data quality and validation: IFRS 16 requires accurate information about all leases. The solution ensures this through:
- Built-in validation rules that ensure data quality on entry
- Checks of calculations
- Reconciliations between sub-processes
- Warnings of deviations or missing data
Internal control: Auditors expect good control over the process. The software provides:
- Role-based access control via SharePoint permissions
- Users only see the leases they have access to
- Read-only or edit rights based on role
- Version history on everything:
- All changes are logged
- You can see who changed what and when
- You can roll back to earlier versions
- Segregation of duties supported through permissions
Monitoring IFRS 16 compliance:
- Checklists for compliance requirements
- Monitoring that all leases are recognised correctly
- Checks of disclosure requirements
- Documentation of accounting policies
Audit and documentation: When the IFRS 16 figures are audited, traceability is critical. The solution provides:
- The accounting journal documents which leases, calculations and assumptions the postings are based on
- All documents and data stored centrally in SharePoint
- Version history retained
- Easy access for external auditors
Effect: Gives CFOs, group chief accountants and controllers full control and confidence that the process is secure, traceable and audit-ready.
6. Analytics & Optimization: continuous improvement
The challenge
Once day-to-day operation is running, it is important to be able to analyse the lease portfolio and find improvements, for example:
- What types of leases do we have?
- How much do they cost?
- Can we negotiate better terms?
Automation with ShareControl IFRS 16
Portfolio analytics: IFRS 16 gives better insight into lease liabilities. The solution offers:
- Interactive dashboards with visualisations
- Analysis of the lease portfolio by type, department, value and term
- Trend analyses over time
- Comparison with budget
- Cost-benefit analyses of new leases
Search across libraries: The solution lets you search across libraries:
- Search and filter across all libraries the user has access to
- Quickly find specific contracts or groups of contracts
- Identify leases that expire soon
- Better overview of your leased assets
Custom views:
- Users can create and save their own views
- Choose which columns to show
- Share views with colleagues
- Switch easily between different perspectives
Effect: Gives management better insight into the lease portfolio and a basis for informed decisions about future leases.
IFRS 16 system and security built into Microsoft 365
ShareControl IFRS 16 is built as an SPFx web part (SharePoint Framework) for SharePoint Online, which means:
Integrated into your organisation’s existing Microsoft 365 environment
- Installed directly in your organisation’s own Microsoft 365 environment
- No external systems or vendor hosting
- Uses Microsoft Entra ID (formerly Azure AD) for sign-in (SSO) and permissions
- No separate passwords or user accounts
- Subsites can be used for separate instances (for example different companies)
Data and security
The data is stored securely in your organisation’s own environment:
- All information is stored in SharePoint libraries and lists
- Users work with their normal SharePoint permissions
- No elevated permissions – users can only see what they have access to
- The solution respects the customer’s IT policies and governance
Integrated with other Microsoft products
- SharePoint – central storage of contracts and key documentation, with easy entry and updating of contract metadata.
- Integrated with Microsoft Teams
- Power BI – visualisation and analysis of contract data in Power BI. Get an overview of key information and cash flow, and search contracts by supplier.
- Power Automate – automatic alerts by email or Microsoft Teams for key deadlines and dates, so you are always up to date.
- Microsoft 365 – Word for contract editing and collaboration, Teams and Outlook for notifications (via Power Automate), and Excel for analysis and reporting of contract data.
Integration with finance systems
One of the biggest advantages of ShareControl IFRS 16 is that the IFRS 16 postings flow into the finance systems you already use.
By default, the solution delivers an accounting journal in a format that suits your accounting or consolidation system. Direct integration can be set up as an add-on on request. Supported systems include:
ERP and consolidation systems:
- SAP
- Oracle/HFM (Hyperion Financial Management)
- Cognos (IBM Cognos Controller)
- Visma
- Unit4 Agresso
- Cantor
- OCRA
- And other systems
Business case: what are the benefits?
Let us look at a concrete example of how software can improve the IFRS 16 process:
Situation: A medium-sized company with 150 leases (cars, premises, IT equipment, etc.)
| Process | Before automation | After automation |
|---|---|---|
| Manual updates per month | 2–3 days | 0.5 days |
| Quarter-end closing | 5–7 days | 1–2 days |
| Year-end closing | 10–15 days | 3–5 days |
| Risk of accounting errors | High | Minimal |
| Audit trail | Difficult | Complete |
| Total per year | 60–80 days | 15–25 days |
Gains:
- 45–55 days freed up per year for more value-adding activities
- Lower audit fees (better documentation and less time)
- Better compliance and lower risk of errors
- Better insight into the lease portfolio
- No manual double entry: postings are uploaded to the ERP system from the accounting journal
- Faster period close with automated data flow
- Consistent reporting across systems
ROI: Typically a 6–18 month payback period, depending on the size and complexity of the company. For larger groups with many leases and a need for multi-currency and ERP integration, the gains are often even greater.lse og kompleksitet. For større konsern med mange leieavtaler og behov for multi-valuta og ERP-integrasjon er gevinstene ofte enda større.
Conclusion: from burden to competitive advantage
IFRS 16 compliance does not have to be a heavy, manual process. With ShareControl IFRS 16, your company can automate the whole process – from data collection to reporting.
ShareControl IFRS 16 gives finance departments a modern, secure and efficient solution for handling the whole IFRS 16 process – built on your existing Microsoft 365 infrastructure, with an accounting journal for your ERP system.
Ready to automate your IFRS 16 processes?
Contact Share Control for a demo and see how the solution can be adapted to your specific needs.
Do you have questions about ShareControl IFRS 16?
Get answers to your questions or a quick walkthrough of how ShareControl IFRS 16 works and integrates with your Microsoft 365 environment.
About Share Control AS
Since 2015, Share Control AS has delivered system solutions for document and contract management in Microsoft 365. ShareControl IFRS 16 is a specialised solution for IFRS 16 compliance, built on our experience of making complex processes simple and efficient for finance departments.
The solution is used by companies across the Nordic region that need a secure, efficient and scalable way to meet IFRS 16 requirements.
This article is based on ShareControl’s product documentation and industry best practice for automating IFRS 16 processes.
