A good IFRS 16 tool is half the job, but the tasks and duties themselves can be both time-consuming and professionally challenging. Now you can get professional help – from people who are experts in using the tool and have helped hundreds of companies with IFRS 16 reporting.
IFRS 16 work can be challenging and time-consuming. First, you must map all contracts and determine the lease payments. For each contract you need to find the lease term and find the right discount rate. That’s before you calculate the present value of the lease payments – again for each and every contract. This is used to recognize the liability and the asset, plus to recognize the right-of-use value.
Does it sound daunting? Well, there’s actually more to do.
A good tool is a prerequisite for managing leasing contracts in accordance with the IFRS 16 requirements. You must have the knowledge of IFRS 16 and the experience of practical handling of the contracts yourself. You must also have time available to carry out the actual IFRS 16 reporting.
Meet two IFRS 16 experts and the advisory team
Fortunately, there are people like Karl Oscar Rosli and Pål Havneraas at House of Control. They are two of the experts helping clients to solve the part of the IFRS 16 puzzle that software cannot solve alone.
Get to know Karl Oscar Rosli
Karl Oscar is the team leader for the IFRS 16 solution at House of Control, which is known for its tool that helps users manage leasing contracts according to the requirements of the IFRS standard.
As one of the foremost experts on the practical use of the solution, Karl Oscar has helped the vast majority of House of Control's customers with everything from registration of IFRS 16 contracts, discount rates and present values to reconciliations and reporting.
Get to know Pål Havneraas
Karl Oscar receives ongoing assistance from Pål Havneraas, who is a controller in the House of Control Group. Pål has five years of experience as an auditor at Big Four firm EY (Ernst & Young), where he helped listed and unlisted companies with – among other things – IFRS questions.
House of Control Group is a company that eats its own dog food. As a listed company before we became part of the Visma family, Pål had the main responsibility of ensuring that we complied with all the requirements of the IFRS 16 standard.
Together, the two along with other colleagues help House of Control customers comply with IFRS 16. Clients are in most industries, including in the Professional Services, Finance and Automotive industries.
Repeating and professional challenges
IFRS 16 – with or without a digital tool – consists of many different and repetitive tasks:
- Reconciliation of ERP against input from House of Control's IFRS 16 solution
- Change and update of discount rate
- Reconciliation of changes before reporting
- Monthly revision and review of contracts
- Maintenance of the chart of accounts adapted to the ERP and consolidation system
- Handling of deviations that are detected
- Reassessment of the contracts
- Categorization of the contracts
- Documentation for the auditor in the annual accounts
Pål says that IFRS 16 reporting has several inherent challenges for the CFO and the finance department:
"Many of the IFRS 16 tasks are normally done quarterly or annually by financial staff in listed companies and others who use IFRS. This means that very few people become experts in tools and methods. Many spend more time than necessary with everything from reconciliations to updating discount rates and reassessing agreements. Customers are often unsure whether they have used the correct procedure."
IFRS 16 expertise directly to the customer
Karl Oscar has helped most House of Control customers get started with the use of the unique lease compliance software. The customer often comes back to him and his colleagues when they use the tool, he says:
"Since IFRS 16 was introduced in January 2019, we have helped customers in most industries, including retail, transport, services and energy. They have all kinds of professional challenges related to rental and leasing agreements in the accounts. There are many different tasks to be solved, which can be frustrating both because it is difficult and also because the CFO's day only has 24 hours."
In short, it is this experience that House of Control now offers with the IFRS 16 Advisory service. As the customers' trusted helper in IFRS 16 matters, Karl Oscar, Pål and their colleagues have developed a set of unique features:
"The fact that we are the developers of Europe's leading tool for IFRS 16 management has given us a double advantage. No one has used the tool more than us, and fortunately we are experts in the use of our own solution. It also means that we have seen the vast majority of types of rental and leasing agreements when we have helped our several hundred customers," says Pål.
Customers who use IFRS 16 Advisory often experience double the savings: They spend less time in their own department to carry out the demanding tasks. And companies that make use of other external assistance see that they save many hours in consultancy use.
"For me, there is an obligation in calling something best practice. With the tools we have and the experience we have gained from so many customers, I think we can say that we deliver is best practice within IFRS 16 reporting for our customers. It feels pretty good to see how grateful the customers are for the work we do for them," says Karl Oscar.
House of Control basically offers three different packages for companies with different needs within IFRS 16, with between 6 and 12 hours of assistance each quarter.