Under AASB 16 (IFRS 16 internationally), businesses with large portfolios of operating leases will be impacted as the new standard requires lessees to recognise assets and liabilities arising from these leases on the balance sheet. Soft4Lessee, a certified add-on to Microsoft Dynamics NAV and Business Central, is a software tool for lease accounting and will help your business to meet the new requirements, plan the transition and stay compliant.
Features of Soft4Lessee:
Plan the transition to AASB 16
Soft4Lessee allows your business to calculate the impact of transition and select from one of the transition options (retrospective or cumulative catch-up).
Upload new leases every month
Leases can be entered manually or easily uploaded into the system using the data import function. An Excel template can be downloaded from NAV/Business Central, filled out with the lease data and imported into the system. Leases denominated in foreign currency can also be accounted for as well as leases with a non-lease component.
The data will be validated, and the system will notify the user of any errors via a warning message, for example if the lease data is incomplete or in the incorrect format.
Leases can be updated or amended at any time on the lease card. The system will calculate the impact of the modification on the lease liability and right-of-use asset and produce G/L postings to reflect the changes. There is also the ability to view an audit trail of changes made via the change log.
Be notified when leases expire
The Renewal and Termination Option on the Lease Agreement Card allows the user to set up notifications when a lease is almost expired. For example, a notification can be set up to send an email to the user 3 months before the expiration of the lease so that they can extend the lease if required.
Easily manage your database of lease agreements
A list of all leases can be viewed via a tile on the Role Centre screen. Each lease can be tagged with a status, such as in deliberation, signed, active or extended. Scanned lease contracts and other supporting documentation can also be attached to the lease card.
The list can be sorted by any column or filtered by any value.
Leases can also be exported to excel at any time, allowing for reporting or making bulk amendments which can then be re-imported back into NAV/Business Central.
Viewing the lease payment schedule of any lease will show the due dates and amounts of upcoming lease payments split by lease and non-lease components. This schedule can be edited and if there are any irregular payments, they can be manually added in.
Soft4Lessee will also project the lease liability over the lease term (by lease, grouped by similar leases or overall portfolio) and the asset value over the asset lifetime (by unit, asset class or overall portfolio), with the user able to view these projections as a list or as a chart.
Create and download G/L Postings each month
At the end of each month, the user can post the journal entries to the G/L. Once the dates of the period are entered, the system will calculate and post depreciation, interest accruals and payments due as well as calculate and post any reassessment entries for lease variations and closing postings for any leases expired during the period.
The G/L postings are also able to be exported and viewed in excel in detail or summary level.
There are a range of reports available including a Lease Liability Report showing the current and non-current liability by month or by asset category, a Maturity Analysis Report and a Right-of-use Asset Report, which breaks down acquisition value and accumulated depreciation/impairment by asset category.
All reports can be exported to Excel for further analysis and reporting. The system also makes Cash Flow Reporting easier, splitting lease payments into the principal and interest portion.
Soft4Lessee is a great tool to help your business manage this transition, meet the requirements and easily maintain your lease portfolio in the future.
Charmaine is a Solution Specialist at EBS. Charmaine holds a decade of accounting and finance experience throughout industry sectors including Hospitality, Utilities and NFP. As an Accountant, Charmaine has previously been responsible for the successful implementation and use of Microsoft Dynamics NAV and Jet reports, where her duties ranged from financial and management reporting, variance analysis and day to day finance operations.