{"id":14684,"date":"2024-06-17T10:10:27","date_gmt":"2024-06-17T10:10:27","guid":{"rendered":"https:\/\/sharecontrol.io\/?p=14684"},"modified":"2024-08-01T10:04:57","modified_gmt":"2024-08-01T10:04:57","slug":"benefits-of-ifrs-16-centralized-lease-accounting","status":"publish","type":"post","link":"https:\/\/sharecontrol.io\/en\/ifrs-16-en\/benefits-of-ifrs-16-centralized-lease-accounting\/","title":{"rendered":"Benefits of IFRS 16 & Centralized Lease Accounting"},"content":{"rendered":"\n

The benefits of IFRS 16 goes beyond transparency and compliance. In this article, we will expand on the advantages that IFRS 16 software support can provide for organizations that have already implemented IFRS 16<\/a> and organizations that consider transitioning to IFRS standards in their financial reporting.<\/strong><\/p>\n\n

Centralizing lease management under IFRS 16<\/a> brings a structured approach and robust solution to lease accounting<\/a>, streamlining processes and improving control over lease portfolios.<\/p>\n\n

Alot of businesses have already implemented centralized data gain control over their lease agreements. As stated by PwC, the right tools to manage leases have enabled organizations to reduce risk and achieve cost reductions. This applies both before they enter into leases and throughout the entire lifecycle of managing their leases.<\/p>\n\n

Yet, there are still a significant number of companies that are in the early phases of getting full visibility and analyzing their lease agreements and the associated data. PwC’s survey reveals that over half of the surveyed companies, utilize spreadsheets to a certain extent, and nearly 40% anticipate adopting a new IT solution within the next couple of years.<\/p>\n\n

So how does IFRS 16 software help organizations achieve greater value, efficiency and cost reductions?<\/p>\n\n

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Benefits of IFRS 16 & Centralizing Lease Management<\/h2>\n
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Only 40 per cent of the respondents in the PwC survey organize their rental processes centrally on an ongoing basis.<\/p>\nPWC Survey<\/a><\/cite><\/blockquote>\n\n

A significant challenge to capturing the full benefits of “IFRS 16 improvements” lies in the fact that numerous businesses still manage their leasing arrangements in a decentralized manner, despite central management of IFRS 16 implementation initiatives This decentralization prevents the adaptation of best practices, process automation, and the realization of additional advantages beyond basic compliance, as outlined below.<\/p>\n\n

The PwC survey points out three areas in particular where a company can improve the lease management processes and get significant benefits from adopting a centralized IFRS 16 system:<\/strong><\/p>\n\n

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  1. 1. Better integration of best-of-breed software in the current ERP Software or Financial Consolidation Software and other business systems, or implementation of own software if the organization currently uses spreadsheets to IFRS 16<\/a>.<\/li>\n\n\n\n
  2. 2. Optimization and automation of Contract Management<\/li>\n\n\n\n
  3. Analyze data on leases to identify areas for cost reduction and more (cost) efficient use of assets.<\/li>\n<\/ol>\n\n

    Our customers have also expressed several advantages from our IFRS 16 solution:<\/strong><\/p>\n\n