Lease Accounting with SAP: IFRS 16 and ASC 842

... Foreword ... 15

... Preface ... 17

... Introduction ... 19

... The Shift: Regulatory Changes at a Glance ... 19

... The Impact: Changes to Financial Processes ... 30

... The Solution: Leasing Systems from SAP ... 36

... Summary ... 39

1 ... Lease Accounting Basics ... 41

1.1 ... Building Blocks of a Lease ... 41

1.2 ... Lessee Accounting ... 45

1.3 ... Lessor Accounting ... 62

1.4 ... Summary ... 73

2 ... Evaluating Compliance Readiness ... 75

2.1 ... Leasing Requirements ... 75

2.2 ... Master Data ... 78

2.3 ... Business Processes ... 90

2.4 ... System Changes ... 96

2.5 ... Summary ... 108

3 ... Managing Your Leasing Project ... 109

3.1 ... Defining the Scope ... 109

3.2 ... Establishing Timelines and Deliverables ... 112

3.3 ... Choosing Your Team ... 130

3.4 ... Setting Your Budget ... 134

3.5 ... Kicking Off Your Project ... 142

3.6 ... Summary ... 145

4 ... Implementing SAP Lease Administration by Nakisa ... 147

4.1 ... Before You Begin ... 147

4.2 ... Settings Tab ... 157

4.3 ... Master Data Configuration ... 167

4.4 ... Data Management ... 203

4.5 ... Build Management ... 208

4.6 ... Schedule Jobs and Thresholds ... 211

4.7 ... Field Management ... 213

4.8 ... Caption Editor ... 214

4.9 ... Logs and RFC Traces ... 215

4.10 ... Summary ... 218

5 ... Configuring SAP Flexible Real Estate Management for Lease Valuations ... 219

5.1 ... Basic Settings for Balance Sheet Valuation ... 222

5.2 ... Balance Sheet Valuation of Contracts ... 226

5.3 ... Account Determination ... 240

5.4 ... Special Topics ... 262

5.5 ... Summary ... 266

6 ... Transition Accounting ... 267

6.1 ... Practical Expedients ... 268

6.2 ... Choosing a Transition Approach ... 274

6.3 ... Adopting the Modified Retrospective Approach ... 276

6.4 ... Summary ... 280

Hanno Hofmann has more than 20 years of SAP project experience from various industries, such as high-tech, telecom, financials, automotive, and aerospace. His focus for many years was on lease accounting with RE-FX. Having moved into the IFRS topic in early 2015, he is now a trusted advisor for multiple IFRS 15 and IFRS 16 SAP projects around the world. He is a board member and co-founder at Walldorf Consulting AG. Pamela Lim is a certified SAP consultant, whose interests include identifying unique business challenges and working in dynamic environments. She has a bachelor of commerce degree from the University of Melbourne and is currently engaged in multiple IFRS SAP projects. Joy Mabborang has a bachelor's degree in accounting and is a certified public accountant. She changed careers and moved into IT solutions as a business systems analyst at Lexmark International Inc.; she has now focused on project implementation using SAP software for more than seven years. Joy lives in Germany and works as an IFRS consultant for Walldorf Consulting AG. Louis Teunissen is an architect and principal consultant for SAP Revenue Accounting and Reporting in Walldorf and Singapore. As an IFRS 15 and IFRS 16 course trainer, he delivers training on a global level on behalf of SAP Education. Tom Anderson is the global solution owner for SAP's real estate management solution used by commercial, residential, and corporate real estate organizations around the world. Responsible for identifying trends in the increasingly complex real estate industry, he works with customers to understand how they are impacted by these trends and coordinates with SAP product owners to develop solutions that support them. Tom supports sales teams globally by developing marketing materials, responding to information requests, and educating them on SAP's real estate solution.