IFRS 16 is a new accounting standard for lease contracts, and – when it becomes effective on 1 January 2019 – it will significantly change the business processes of companies that process lease contracts. Every company that leases equipment or rents real estate and submits financial statements in accordance with IFRS or GAAP should expect some major changes. These challenges, however, can be made easier using SAP RE-FX for lease.
Similarly to the situation with IFRS 15, the legislator has again announced the changes to be introduced, and now we have to adapt to these changes. We are a group of several dozen companies, including a listed company (Cyfrowy Polsat S. A.). ”We comply with the highest business standards – this is what stock market investors expect from us. Consequently, we find it critical to adapt to these new requirements,” says Piotr Paduszyński, Manager of the SAP Systems Department at the Cyfrowy Polsat Group.
“A major element of the project was to take into account the existing architecture of the system, which comprised two SAP ERP systems in different versions and a number of non-SAP systems, the characteristics of the Group, consisting of several dozen companies representing different industries, and its high growth rate.
In addition to organisational challenges, the project was also implemented under time pressure as 1 January 2019 was drawing near. Multiple companies, multiple areas and different types of contracts and structures – there are few solutions on the market capable of meeting our needs. SAP delivers the RE-FX module, and it plans to develop this module further. Thus, we hope that the RE-FX standard will be systematically extended in line with our needs and established market standards,” says Piotr Paduszyński.
The project implemented for the Cyfrowy Polsat Group is at the final stage of the development of the business concept for the solution – implementation is just about to start. In order for the whole process to go smoothly, also considering the tight schedule, the Group made sure in advance that the requirements were prepared very thoroughly. Validation of business processes in terms of IFRS 16 requirements together with external consultants combined with internal analysis was the perfect start for the design of the concept and implementation.
“We have no concerns with the progress of our preparations. We use many years of experience of Hicron as a supplier of SAP solutions in the area of real estate management. We have a professional and highly committed internal team and strong cornerstones in the form of specifically defined requirements. All these elements work well together, and the project is moving forward as planned,” summarises Piotr Paduszyński.
The Cyfrowy Polsat Group also plans on further IT development of this area. After IFRS 16 standard support is implemented in all the Group’s companies, the management of all real estate and contracts will gradually be transferred to SAP RE-FX from the business areas that were not previously covered by this module of the SAP system.