Although it may seem like just another accounting difficulty, “IFRS 16: Leasing” is the effect of collaboration of the International Accounting Standards Board and the Financial Accounting Standards Board. The purpose of these organisations was to optimise and eliminate the differences in the areas of operating and finance leases of different countries. The new standard will affect the statements of lessees regarding the inclusion of lease agreements in the books. Every lease, including operating lease, will be regarded as a finance lease agreement (excluding the exceptions described in the standard). This means that the balance sheet of organisations is going to carry new assets. In other words, the lease agreement will no longer be a cost – it will become a liability carried on the asset side of the organisation.
Problem with real estate
The problem with the change in accounting rules will also affect businesses and organisations that lease real estate, both owned and rented. This means that companies that lease spaces will have to use a different method of carrying operating lease agreements. This is where SAP comes to aid with the RE-FX solution. Although the module has already been well established on the market for 10 years, this major change did not go unnoticed by the developer, and, in September 2016, a new note was issued to cover “IFRS 16 Leasing” using RE-FX. The added function of the solution enables the object to be combined with the asset, which meets the accounting requirements. With automatic accounting, it will be possible to keep accounts according to IFRS and US GAAP standards and national regulations using a single operation.