Correct input for correct output
Automated consolidation and calculations come with their own challenges.
“The key is to ensure correct input into the system. Local responsibility is important to achieve correct input. Because, those closest to the contract are the ones with the best knowledge of it. In addition to this, the group finance team double-checks the information provided by the business units.”
For various reasons, Kathinka and her team frequently perform reassessments of a lease. It may be due to a change in the discount rate, a modification of the lease, changes in the scope of the lease, or other factors.
“Since our responsibility is to ensure IFRS 16 compliance, we do several controls on top of the information provided by the business units. With correct input we will get the correct output. The available API enables us to get the data through a data warehouse that we have integrated with our financial reporting system.”
The quality and speed of IFRS 16 management is further strengthened by giving Visma’s auditors reader access to the Complete Control Solution. This way they can do their own calculations based on the same data, making the audit more efficient.
Business unit: Easy to manage lease data
Pål Havneraas represents one of the portfolio companies that is consolidated into Visma’s group reporting.
“Since we were acquired by Visma in November 2022, we have been reporting monthly to Visma Group. This reporting includes profit & loss, balance sheet, cash flow, notes for the financial statements, and lease accounting and IFRS 16 reporting.”
“We can easily update lease data in the Visma’s Complete Control database. And it is just as easy to enter new contracts, change prices, change the discount rate, and more. We see that the decentralization of responsibility is a very efficient way of reporting,” Pål said.
The IFRS 16 process important when onboarding new companies
House of Control was one out of 40 companies acquired by Visma in 2022. Kathinka says that getting IFRS 16 right from the beginning is an important step when onboarding new companies:
“We set up a meeting between the acquired company and our super user, who will ensure that contract data is input correctly the first time. Correct input yields the right output. For example, when you acquire a company the IFRS 16 liability will be the remaining payments. All of this can be specified in Complete Control, which is really great.” She says that this works equally well the opposite way around, when Visma divests businesses
Watch the webinar on-demand
If you missed the webinar, you can sign up and watch the on-demand version here: