FINANCIAL REPORTING ACCORDING TO IFRS 16 // Solution Based on SAP RE-FX

Since February 2016, the new rules of International Financial Reporting Standard (IFRS) 16 apply.

Companies that create financial reports according to the standard need to adjust their business processes and IT solutions:

all rental and leasing agreements in which they are lessee must be recognized as Right of Use (RoU) assets, and lease liabilities must also be recognized on the balance sheet for the entire term of the agreement. This impacts not only the processes and IT functions, but also KPIs such as equity ratio and EBITA.

Using the existing contract management solution in the RE-FX component, SAP has developed a standard solution for financial statements in accordance with IFRS 16.

It offers general contract management and management of the following objects:

  • contractual partners
  • contract objects
  • contract conditions
  • general contract conditions

Furthermore, automatic creation of contract objects in Asset Accounting (FI-AA) is possible and individual rules can be defined for classification and valuation.

The standard solution also provides for automatic calculation and posting of the following items:

  • asset acquisitions and depreciations
  • payment liabilities
  • interest and costs
  • services in leasing agreements
  • items of controlling or profit center accounting