ShareControl IFRS 16 feature
Lease registration and classification in ShareControl IFRS 16
Before IFRS 16 calculations can be run on a lease, the entity must assess whether the contract contains a lease and whether any of the recognition exemptions apply. ShareControl IFRS 16 makes it easier to register new leases, document the basis for each assessment and build a single searchable lease portfolio.
Before the calculation
The first step is to assess whether the contract contains a lease
The IFRS 16 process starts with assessing whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Among other things, the assessment covers whether there is an identified asset, whether the entity has the right to obtain substantially all of the economic benefits from use of the asset, and whether the entity has the right to direct the use of the asset.
Identification of leases against the IFRS 16 criteria
Assessment of the identified asset
Assessment of the right to control the use of the asset
Assessment of whether the contract is within the scope of IFRS 16 and whether the short-term lease or low-value asset exemption can be applied
Documented basis for the assessment on each lease
Classification
Classify the lease correctly from the start
The classification determines whether the lease is recognised on the balance sheet under IFRS 16 or whether it can be treated under an exemption. ShareControl IFRS 16 provides a structured process for documenting the assessment.
| Classification | Example | Classification |
|---|---|---|
| Standard IFRS 16 lease | Lease that meets the IFRS 16 criteria | Right-of-use asset and lease liability are recognised on the balance sheet |
| Short-term rental agreement | Lease term of 12 months or less, with no purchase option | May qualify for the short-term lease exemption |
| Low-value asset | Lease of an underlying asset of low value | May qualify for the low-value asset exemption |
| Contract that does not contain a lease | No identified asset, or the customer does not control its use | Not accounted for as a lease under IFRS 16 |
What our customers say
Why our customers like ShareControl IFRS 16
Share Control has assisted us in importing agreements into the system solution, giving us full control over all lease agreements and our obligations. By ensuring efficient and structured management of lease agreements, we can easily administer and comply with the IFRS 16 regulations.
During the implementation of IFRS 16, we have received extensive and valuable assistance from Share Control. Through close cooperation and thorough support, we have ensured that all leases have been correctly and efficiently imported into the ShareControl IFRS 16 system.
– Henrik Dürr, Financial Controller
Inin Group
In collaboration with Share Control, Fexco has received valuable assistance in mapping and importing most of the leases into the system. This has laid the foundation for compliance with IFRS 16 and ensures accurate reporting for the company in the future.
Throughout the implementation, we have received excellent support in system setup, which involved the automatic upload of a large number of contracts and detailed questions related to IFRS 16.
How it works
How registration and classification work in ShareControl IFRS 16
ShareControl IFRS 16 brings lease data, the basis for each assessment, documentation and the portfolio overview together in one structured process. This gives a better foundation for calculation, reporting and audit later in the IFRS 16 process.
1
Register or import the lease with its core contract data.
2
Assess whether the contract contains a lease against the IFRS 16 criteria.
3
Classify the lease as in scope, short-term, low-value or outside IFRS 16.
4
Store the basis for the assessment, the documentation and a unique contract ID for the next steps in the process.
Import
Import your existing lease portfolio
Many businesses start with an existing portfolio in Excel, an ERP system or reports from leasing companies. ShareControl IFRS 16 makes it easier to move the portfolio into a structured IFRS 16 process.
Import from Excel
Import from other systems
Recurring imports from leasing companies
Comments and documentation, for example for vehicle fleet leases
Standardised data fields across all leases
Microsoft 365
Central lease archive in your company’s own SharePoint
ShareControl IFRS 16 uses the Microsoft environment as part of the workspace. This makes it possible to keep lease documents, assessment templates and portfolio data together in a familiar, controlled environment.
Central archive in SharePoint
Standardised assessment templates
Lease documents in one place
Access control in the Microsoft environment
Audit-ready documentation
Portfolio overview
A searchable, filterable lease portfolio
Once leases are registered and classified in ShareControl IFRS 16, the finance team gets one consolidated portfolio overview across companies and categories.
| Filter | Example | Use |
|---|---|---|
| Company | Legal entity or subsidiary | Reporting and local follow-up |
| Classification | In scope, short-term, low-value | Checking the IFRS 16 treatment |
| Category | Property, vehicles, IT equipment | Portfolio analysis and basis for note disclosures |
| Counterparty | Leasing company or supplier | Supplier overview and documentation |
Each lease is assigned an automatically generated unique contract ID, which makes the lease traceable throughout its life cycle, from registration and classification to calculation, posting, reporting and end of term.
Impact
What it means for the IFRS 16 process
A structured registration and classification process gives better data quality before the calculations start. It reduces manual work and makes the rest of the IFRS 16 process more traceable.
| Impact | What it means |
|---|---|
| Time savings | The time needed to onboard an existing lease portfolio can be reduced significantly compared with manual registration. |
| Consistency | The same data fields and classification rules are applied across all leases. |
| Traceability | The basis for the in-scope, short-term and low-value assessments is documented on the lease. |
| Overview | One central lease portfolio replaces spreadsheets spread across departments. |
Start the IFRS 16 process with better data quality
See how ShareControl IFRS 16 makes it easier to register, classify and document leases before the calculations start.
