ShareControl IFRS 16 feature
Audit trail and documentation in ShareControl IFRS 16
IFRS 16 is not only about calculating the right figure. The entity must also be able to explain how the figure came about, which assumptions were used, which changes were made and what documentation lies behind it.
Background
Why the audit trail is critical in IFRS 16
When the auditor asks about an IFRS 16 figure, showing a final value is rarely enough. The finance team must be able to show the lease, payment schedule, discount rate, exchange rates, changes, postings and reporting basis.
What ShareControl IFRS 16 documents:
Which lease lies behind the figure
Which input fields and assumptions were used
Which discount rate was applied
Which exchange rates affect the reporting
Which modifications or reassessments were made
How the figures connect to the accounting journal and reports
How it works
How the audit trail works in ShareControl IFRS 16
ShareControl IFRS 16 brings leases, input fields, calculations, documentation, postings and reporting together in one solution. This makes it easier to explain the IFRS 16 figures without searching through separate spreadsheets, folders and email threads.
1
Register the lease, payment schedule, rate, currency, company information and documentation.
2
The system calculates IFRS 16 values from the same documented data.
3
Modifications, reassessments, exchange rates and postings are stored in the history.
4
Reported figures can be traced back to the lease, calculation, accounting journal and documentation.
What can be traced?
Traceability from input field to reported figure
ShareControl IFRS 16 documents key inputs, assessments and calculations on the lease, so the figures can be followed through the whole process.
| What ShareControl IFRS 16 traces | Examples |
|---|---|
| Lease data | Lease term, payment schedule, counterparty, currency and attached documents |
| Discount rate | Implicit rate, incremental borrowing rate, portfolio rate and assumptions |
| Payment schedule | Fixed payments, variable payments, index adjustments and changes |
| Exchange rates | Central banks or the group’s own exchange rates |
| Modifications | Renegotiation, extension, termination or change in scope |
| Reassessments | Exercise of options, revised lease term and index adjustments |
| Accounting journal | Postings and ERP basis |
| Reports | Note disclosures, maturity analysis and group reporting |
What our customers say
Why our customers like ShareControl IFRS 16
You have to dare to go inside and look at the system to understand the logic. Then you get a greater understanding and an exercise you should do to see that it is correct. Then you know that it is right for the auditors and you pass the inspection in a safer and more secure way.
– Elisabeth Croce, Business Controller
Frösunda
ShareControl IFRS 16 is a user-friendly and flexible solution that continuously shows us the source of our data. We have over 100 contracts in the system and find that it offers us excellent visibility. This ensures accurate reporting and ensures we have a single repository for the data. The time spent by the team on IFRS 16 compliance has reduced as a result of the implementation of ShareControl.
Lease data
Keep the lease, input fields and documentation in one place
The audit trail starts with the lease. In ShareControl IFRS 16, the lease can be linked to documentation, payment schedule, discount rate, currency basis and calculation assumptions.
Lease and attachments
Payment schedule and lease term
Discount rate and assumptions
Company, currency and dimensions
Classification and basis for the assessment
History
Document modifications and reassessments
IFRS 16 figures change when the lease changes. ShareControl IFRS 16 makes it easier to document what was changed, when it was changed, whether the change is a modification or a reassessment, and how it affected the calculation.
Lease modifications
Reassessments
Change in lease term
Revised payments and index adjustments
Revised discount rate
History of changes and their effect on the calculation
Exchange rates
Trace exchange rates and the translation basis
For leases in foreign currency, the entity must be able to document which exchange rates were used in the calculation and reporting. ShareControl IFRS 16 can link the rate basis to the IFRS 16 values.
Automatic retrieval from Norges Bank or Sveriges Riksbank
The group’s own exchange rates
Average rates for income statement items
Closing rate for the lease liability, and for all balance sheet items on translation into the presentation currency
Exchange-rate basis documented for the audit
Traceability
Trace figures from reporting back to the lease
A reported IFRS 16 figure should be explainable. ShareControl shows the connection between reporting, the accounting journal, the calculation, the assumptions and the lease.
ShareControl IFRS 16 provides traceability between:
Lease and payment schedule
Calculation basis and accounting journal
Changes and updated calculations
Local leases and group reporting
Reporting basis and underlying lease data
Audit challenge
Why is IFRS 16 documentation often cumbersome?
Many entities have correct calculations but spend too much time documenting them. The problem arises when leases, calculations, emails, Excel files, exchange rates and audit evidence are kept in different places.
| Challenge | Example | Consequence | With ShareControl IFRS 16 |
|---|---|---|---|
| Documentation is scattered | Leases in SharePoint, calculations in Excel and comments in email | The finance team spends time collecting audit evidence | Lease, calculation and documentation are kept together in the entity’s own Microsoft 365 |
| Assumptions are unclear | Rate, lease term or classification is not documented on the lease | It becomes hard to explain how the figure was calculated | Assumptions are documented on the lease and follow the calculation |
| Changes are hard to explain | Avtalen er modifisert eller revurdert i perioden | It is unclear which version lies behind the reporting | Modifications and reassessments are stored with history and date |
| Exchange rates must be verified | Leases in foreign currency | The exchange-rate basis must be documented for the audit | The rate basis and rate source are traced to the reported value |
| Group reporting | Several companies submit local IFRS 16 data | Group figures must be traceable to local leases and calculations | Group figures are traced back to the local lease and calculation |
Typical auditor questions
Questions ShareControl IFRS 16 helps you answer
A good IFRS 16 process makes it easier to answer specific audit questions without collecting information from many different sources.
| Audit question | Where ShareControl IFRS 16 can help |
|---|---|
| Which leases are included in IFRS 16 reporting? | Lease overview, company structure, classification and reporting basis |
| How was the lease liability calculated? | Payment schedule, discount rate, present value and amortisation schedule |
| Which assumptions were used? | Documented input fields, rate choice, lease term and assessments on the lease |
| Which exchange rates were used? | Exchange-rate basis, rate source and reporting period |
| Which changes were made during the period? | History of modifications, reassessments, index adjustments and terminations |
| Where does the figure in the note come from? | Traceability from the disclosure basis to the report, calculation and lease |
Make the IFRS 16 figures easier to explain in the audit
See how ShareControl IFRS 16 brings leases, input fields, calculations, exchange rates, history and documentation together in one traceable process.
