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IFRS 16 User Guide Updated 22. December 2021
Share Control AS
© 2021
Chapters
Chapters ........................................................................................................................................... 2
1. Introduction ................................................................................................................................. 1
2. Before you start ........................................................................................................................... 1
3. Frontpage ShareControl IFRS 16 .................................................................................................. 1
4. Introduction to ShareControl IFRS16’s functions ........................................................................ 3
4.1 Lookup .................................................................................................................................... 3
4.2 Search ..................................................................................................................................... 4
4.3 Deleting folders and files ........................................................................................................ 5
4.4 Settings ................................................................................................................................... 6
4.4.1 Landing page .................................................................................................................... 7
4.4.2 Library .............................................................................................................................. 7
4.4.3 Metadata ........................................................................................................................ 10
4.4.4 Field descriptions ........................................................................................................... 11
4.4.5 Guidelines ...................................................................................................................... 12
4.4.6 Hide fields ...................................................................................................................... 14
4.4.8 Lock reporting period ..................................................................................................... 17
4.4.9 Properties and Support .................................................................................................. 17
4.4.7 Synchronization .............................................................................................................. 18
4.4.8 IFRS 16 ............................................................................................................................ 19
4.5 Libraries, folders and files ..................................................................................................... 20
4.5.1 Creating contracts (Folders): from draft to publish ....................................................... 21
4.5.2 Using the funnel (filtering and sorting by metadata/columns) ..................................... 24
4.5.3 Folders options (Cogwheel) ........................................................................................... 26
4.5.4 Files options (Cogwheel) ................................................................................................ 32
4.5.5 Uploading documents .................................................................................................... 33
4.5.6 Locking folders and documents ..................................................................................... 34
4.5.7 Sharing specific documents ........................................................................................... 35
4.5.8 SharePoint and file menus in Word, Excel and PowerPoint .......................................... 35
4.5.9 Mobile access ................................................................................................................. 35
4.6 Processing tasks .................................................................................................................... 35
4.6.1 Task details on the frontpage ........................................................................................ 36
4.6.2 Assigning tasks ............................................................................................................... 37
4.6.3 Task status on folders .................................................................................................... 38
5. Upload contracts using SharePoint ............................................................................................ 39
5.1 Tips for creating folders ........................................................................................................ 40
6. Upload contracts using the excel template ............................................................................... 41
6.1 Register start date and end date of lease payment correctly .............................................. 45
6.1.1 Actual lease payment pattern ........................................................................................ 45
6.1.2 Registers cash flow based on a date .............................................................................. 46
6.1.3 Check calculation warnings ............................................................................................ 46
7. Rent free periods/ periods with different lease payments/ other non-lease payments .......... 46
7.1 Rent free periods/ periods with different lease payments .................................................. 46
7.2 Other non-lease payments ................................................................................................... 48
7.3 Index regulation of other non-lease payments .................................................................... 49
8. Foreign currency exchange ........................................................................................................ 50
8.1 Foreign entities ..................................................................................................................... 51
8.2 Contract currencies different from the entity’s functional currency ................ 54
9. Business combination (IFRS 3. 28 A and B) ................................................................................ 57
10. Sub lease and use of the solution as a lessor (Pro version) ..................................................... 58
10.1 Offset ROU asset against lease receivable ............................................................. 61
11. Metadata (Contract data) for IFRS 16 ...................................................................................... 61
12. Consistency in data and summary of calculation rules............................................................ 69
13. Adjust index or rate and log other change .............................................................................. 69
13.1 Adjust index or rate ............................................................................................................ 70
13.2 Update index or rate for several contracts simultaneously (Mass update) ....................... 74
13.3 Roll back mass adjustments ............................................................................................... 83
14. Lease modification and reassessment ..................................................................................... 84
14.1 Change date ........................................................................................................................ 86
14.2 Modify a contract ............................................................................................................... 88
14.3 Exercise an extension option that previously has not been exercised .............................. 91
14.4 Terminate a lease contract (In the lease period) ............................................................... 94
14.4.1 Situation A: Reassessment ........................................................................................... 94
14.4.2 Situation B: Modification ............................................................................................. 96
14.4.3 Situation C: Immediate termination ............................................................................ 98
14.5 Purchase option .................................................................................................................. 99
14.6 Change in the discount rate ............................................................................................. 100
14.7 Residual value guarantee ................................................................................................. 102
14.8 Reduction in scope - modification versus reassessment ................................................. 102
14.9 Reassessment of option and increase in scope ................................................................ 108
14.10 Termination and relocation to new premises owned by the same landlord ................. 111
14.11 Impairment of the ROU asset ......................................................................................... 114
14.12 Covid-19-Related Rent Concessions ............................................................................... 115
14.12.1 Release of payments ................................................................................................ 116
14.12.2 No rent is payable in Q3 2020, rent in Q3 2021 is increased by 11’. ....................... 118
14.12.3 No rent is payable in Q3 2020 and one quarter is added to the end of the lease at a
rent of 10’ for that quarter. .................................................................................................. 119
14.13 Log multiple changes in the same date or the same month .......................... 120
14.14 How to test the accounting of changes .......................................................................... 121
15. Errors ...................................................................................................................................... 121
15.1 Roll back to previous version ............................................................................................ 121
15.2 Accounting date ................................................................................................................ 125
15.2.1 A lease contract has not been registered when it was entered ................................ 127
15.2.2 Forgot to register index regulation ............................................................................ 129
15.2.3 A contract was entered with incorrect lease payments ............................................ 130
15.2.4 Discount rate is not correct ....................................................................................... 131
15.2.5 Exercise of an extension option was not registered in the correct period ................ 133
15.2.6 Forgot to change the discount rate when exercising an extension option ............... 135
15.2.7 Change the start date of a contract to an earlier or a later date .............................. 135
15.2.8 Change in the asset removal obligation..................................................................... 137
15.2.9 Change post-paid to prepaid ..................................................................................... 138
15.2.10 Forgot to register the termination of a contract ..................................................... 140
15.2.11 The termination of a contract is incorrect ............................................................... 143
15.2.12 Remove a lease that has incorrectly been registered as an IFRS lease ................... 145
16. Deleting a lease contract ....................................................................................................... 147
17. Implementing IFRS 16 – the implementation options ........................................................... 148
17.1 The full retrospective implementation ............................................................................ 148
17.2 ROU asset = lease liability ................................................................................................. 148
17.3 Measure ROU asset retrospectively ................................................................................. 149
17.4 Transition relief for leases ending within 12 months and low value assets lease ........... 149
18. Calculation.............................................................................................................................. 150
18.1 Access to the calculation spreadsheet ............................................................................ 151
18.2 Establish link between SharePoint and Excel ................................................................... 151
18.2.1 Warning about disconnected workbooks (Warning ID 605) ..................................... 154
18.3 The main calculation spreadsheet (Menu) ....................................................................... 154
18.3.1 The Menu spreadsheet .............................................................................................. 155
18.3.2 Update data from SharePoint .................................................................................... 155
18.3.3 Settings ....................................................................................................................... 156
18.3.4 Lookup periods ........................................................................................................... 158
18.3.5 Currency ..................................................................................................................... 159
18.3.6 Go directly from the calculation file to the contract in SharePoint ........................... 161
18.3.7 Search filters .............................................................................................................. 162
18.3.8 Modify columns in the view ....................................................................................... 164
18.3.9 Archive calculation and serve links between SharePoint and calculation file ........... 165
18.4 The calculation of individual contracts ............................................................................. 168
18.4.1 Calculation spreadsheet for individual contracts ...................................................... 168
18.4.2 Data that registered in SharePoint are available for the individual contract. ........... 169
18.4.3 Lease payments that occur in the previous month ................................................... 171
18.4.4 Go directly from the calculation file to the contract in SharePoint ........................... 172
18.5 Forecast and Budget (Pro version) ................................................................................... 172
18.6 Export result (Integration) – additional product ................................................ 177
18.7 Error .................................................................................................................................. 177
18.8 Warnings ........................................................................................................................... 178
18.9 Changes ............................................................................................................................ 178
18.10 Reconciliation ................................................................................................................. 180
18.11 Note disclosures ............................................................................................................. 181
18.11.1 Critical judgment and accounting estimates ........................................................... 183
18.13 Fixed assets footnote (Pro version) ................................................................................ 186
18.14 Other information about Calculation ............................................................................. 187
18.14.1 The DCF model ......................................................................................................... 187
18.14.2 Depreciations ........................................................................................................... 188
18.14.3 Fixed adjustments .................................................................................................... 188
18.14.4 Daily rates ................................................................................................................ 189
18.14.5 Go back to an old calculation ................................................................................... 189
18.15 Storing calculation .......................................................................................................... 190
18.16 Include other non IFRS 16 contracts in the calculation file ............................................ 192
19. Review and audit .................................................................................................................... 193
20. FAQs (Frequently asked questions) ....................................................................................... 193
20.1 I have established a new library with contracts in SharePoint, but they’re not included in
the calculation, even if I press Update leases. ......................................................................... 194
20.2 When a new contract should be registered in Share Control .......................................... 194
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1. Introduction
This user guide helps you to start using ShareControl Contract and IFRS 16. It demonstrates the
functionality of the ShareControl add-in for SharePoint IFRS 16, as well as the use of the
ShareControl IFRS 16 excel VBA calculation.
The installation process of the ShareControl add-in and organization of sites are fully described in
the installation manual.
2. Before you start
It’s important that you consider how you want to organize your contracts in the IFRS 16 libraries
before you start, since it can be quite complicated to change the structure after you have
uploaded a significant number of contracts.
Here are some questions that we recommend considering before you start.
1) Consider your legal structure and how your financial processes are today.
a. Will the IFRS 16 contracts and calculation be entered and maintained by individual
entities, by the group or by segments?
b. How does the review and audit process work today (Is it by legal entities, by
segments, etc.)?
c. How are the IFRS figures reported today? By reporting entities, by the group, etc.
(Group IFRS entries).
d. Do I need an overview of all IFRS 16 contracts in the group or do I prefer reporting
by different reporting entities?
e. Will I have dedicated employees to review IFRS 16 contracts for the consistency
of input data? Would I engage with an external consultant to do this work?
f. Is access/ limited access critical for me?
g. How do I foresee the maintenance of the IFRS contract management, going
forward? Do I foresee the accounting data included in my accounting system or
kept separate and adjusted in the IFRS reporting?
2) ShareControl and its suppliers will help you evaluate how sites, access and systems
should be set up. We’ll also provide you with templates to facilitate the set up.
3. Frontpage ShareControl IFRS 16
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The front page provides you with the following information:
• The status of your tasks (See the Task section).
• Contracts that need to be reviewed, due to an upcoming index regulation or a contract
option (Extension option, termination option and purchase option) or expiration.
The information can be accessed directly from the front page by clicking on the task or the
reminder. You can also include the reminder in the calendar or send an email directly to the
responsible person by clicking
Expand the Date filter by clicking the menu below.
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Please note that we introduced an integration with Power Automate for notifications in 2021. See
a separate guide for set up and use.
4. Introduction to ShareControl IFRS16’s functions
Microsoft 365’s standard menu is on top and will be available for you when you work in the add-
in.
Please note that the language in the menu will follow the language in your Microsoft 365’s general
setup. If you use a different language than English in your set up, this menu and some of the
property choices will appear in your chosen language.
ShareControl’s main menu includes Up One Level (Only for administrators), Recycle Bin, Settings
(Only for administrators), Tasks, Mass Adjustments and Recent Documents. The Share button
and the Search field are on the right side. The libraries are shown to the left below the logo, where
you can alternate between the front page and different libraries.
4.1 Lookup
You find the Lookup function in the right corner.
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In the Lookup function you’ll access downloadable IFRS calculation templates, along with
guidance and IFRS standards. Accessing the relevant IFRS requires a subscription to eIFRS. See link
for subscription.
https://shop.ifrs.org/ProductCatalog/Product.aspx?ID=1595
(Link for online subscription, - recommended if you don't need the printed standards.)
You’ll find the Installation manual under User Guide.
There are also links to relevant articles, etc. And you can add internal guidelines by clicking
Calendar and Guidelines in the submenu of Settings.
4.2 Search
You can search through all the documents in a site, or all documents you have access to, through
the Search function in SharePoint.
The Search function, located in the upper right corner, is available in SharePoint and ShareControl.
The search results are shown separately and look like this:
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4.3 Deleting folders and files
Everything deleted in SharePoint and ShareControl goes to the Recycle Bin on the site.
The Recycle Bin is emptied either manually or automatically after 93 days. The content is then
moved to the administrator’s recycle bin. The administrator can access deleted content from this
recycle bin.
Select the folders/ files you want to restore and select Restore.
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4.4 Settings
ShareControl IFRS 16 is customized for each company or group of companies. If you want the
same settings to be copied onto multiple sites, ShareControl or your local IT partner can assist.
Before you start to register contracts, you need to go through a setup, as described below, for
each site:
Click Settings in the top menu to move to the following site (Only for administrators).
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4.4.1 Landing page
The Menu let you choose which page appears first when you open the add-in. You will normally
have the standard setting here.
4.4.2 Library
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To configure, go to the Library menu. It’s important that you select the relevant category for
creating a library, as the metadata will vary from one category to another.
By clicking on a single category, you can see which libraries you have created in the different
categories. You can also hide, create new, and remove libraries from the category. Note that if
you have ShareControl Contract, it's only one type of libraries that are available. If you have the
full versions of ShareControl Contract and IFRS 16, you’ll have different kinds of libraries available
for different kinds of contracts (Land and properties, other IFRS 16 contracts and contracts outside
the scope of IFRS 16).
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After the configuration of a new library, click to get the configuration updated.
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Click on the right to change the name of a library, and when finished, click to save. Click
to hide the library. You can create new libraries by typing in the text and clicking . You
can find all hidden libraries by clicking the drop-down menu called, Choose existing, and you can
unhide them by selecting them individually.
4.4.3 Metadata
Metadata (Or Index data) is used in all libraries to organize files and prepare calculations under
IFRS 16. Metadata is shown as a dropdown menu when you’re creating or editing folders. The use
of metadata creates a uniform document structure. The metadata in IFRS 16 will be consistent for
all folders. If metadata is not selected, the sorting functionality will be less effective.
The following metadata should be set (Included in the drop-down menu) before you start to
register a contract:
Lease category (The standard IAS 16 classification) - Use to classify ROU Assets for footnotes, etc.
Company – Legal entity that has entered the contract.
Department – Should be consistent with your accounting system to facilitate reconciliation and
transfer of files.
Discount rate category – Is used to set discount rates in the calculation of present value of the
lease liability for new or modified/ reassessed lease contracts. Categories of discount rates can
be based on geography (Countries), rental period and underlying assets.
Currency – Includes all relevant currencies that the group operates. Please use the same
abbreviation as used by the bank/ accounting system of updated currency rates.
Type of lease adjustment – CPI, interest, market adjustments or any other adjustment.
Under the Account vouchers, you also need to set the year and period (Normally the month) as
metadata. This is set by default but can be modified.
To edit the metadata, move to the relevant category and click the title you want to edit. Click
on the right to edit the value, and when finished, click to save. Select to delete. You can
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create new values by typing in the text and clicking at the end of the metadata list.
Note: Deleting or changing values in Settings will affect all folders where these values
have been used. The metadata will also be changed in locked folders.
If the app is set up several times, the metadata cannot be changed for all installations
at the same time. Metadata changes need to be made per installed app.
When you’re creating a new folder in a library and are missing a value in the metadata,
you can’t move directly from the folder to Settings to create a new value. The folder needs
to be saved first, and then you can change the settings for the metadata by going back,
editing the folder, and adding the new value.
If a category of metadata can’t be used, these can be removed. We can assist you in
doing this. It’s not recommended that you try to do this by yourself.
4.4.4 Field descriptions
Field description is used for describing and explaining common metadata. You can choose
metadata from the dropdown menu and create new values by typing or editing the description in
the text and clicking . Click on the right to edit the value and when finished, click
to save. Select to delete.
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By clicking on the question mark by the side of a metadata category for IFRS 16, the description
of the metadata will be shown on the screen.
4.4.5 Guidelines
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The administrator can add internal guidelines, relevant articles, links, etc. under guidelines.
Combine the company’s guidelines with the IFRS standards to have all the information in one
place. This way, you’ll save time for emails, version conflicts, etc. You can also add forms,
templates and links to other websites, such as IFRS 16 articles, Auditors website, etc.
We recommend separating guidelines from other documents, as these are used to understand
company processes and principles and therefore shall not be edited by the users (As opposed to
folders and documents in the library). Internal guidelines can be uploaded to the relevant library
and will not be shown in other libraries.
Start by saving the file in SharePoint. Click Up one level in the top menu. Move to Site Contents
and use the Documents library to upload your guidelines, etc.
If you’re unable to find the Site Contents, click the cogwheel to the
upper right and select Site Contents from the menu.
Go back to the Settings app, and select the Calendar and guidelines tab.
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To add guidelines, enter the title, type or copy a URL, upload a file, etc. Or use to find the
document that you wish to add. (You can now browse Document and select the file uploaded to
the Document library as described above).
When you click , you will see the window below. You can also select the library where you
want to place the file. Select Choose libraries and select the libraries where the link should be
placed. Click to save.
To make the change, click the , and when finished, click to save. To delete, click .
4.4.6 Hide fields
The IFRS 16 solution contains all fields and metadata that might be relevant for companies using
the solution. Different companies have different situations and might not need to use all the
fields. The 2021 version makes it possible to hide fields that are not relevant.
Go to Settings and IFRS 16.
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Click on Show additional options.
You can hide fields that might not be relevant. We can assist you in this process.
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You can also enable or disable the Cash Flow function. If it’s enabled, the system will automatically
split the lease payments according to the change date to more effectively show the change in the
lease payments before and after the specified change date.
As illustrated below, if the Cash flow function is enabled, you can view the historical data marked
in yellow before the change date under the lease payment.
You can display or hide links to relevant public websites where the CPI rate can be read.
You can choose between linking to ssb.no (Norway) or scb.se (Sweden) or you can choose both.
The link will appear under Index regulation for individual contracts
or under the Mass adjustment function:
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4.4.8 Lock reporting period
In order to avoid changes or new contract to be entered in periods that are closed, you can set a
start date for a reporting period. This is to ensure that already reported figures are affected. For
errors in previous periods, see the new accounting date functionality (Section 15).
Go to Settings and choose IFRS 16, set the date and press Save.
4.4.9 Properties and Support
Information about your license key. You need your license key to get new versions.
Register the company or group that will appear on the front page.
Hide or show the Tasks function.
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Hide or show the contracts that need to be reviewed on the frontpage.
A choice as to whether to open files directly on the PC instead of on the web. The default behavior
of Macro documents is to open documents in Client Applications. The default behavior of other
type of documents is to open documents in Office Web Apps.
Upgrade the structure of the libraries after you’ve upgraded the app to a newer version with a
different library structure.
Information about support.
4.4.7 Synchronization
You can get a synchronized copy of the content in your libraries by using OneDrive combined with
SharePoint.
This function is useful if you need to copy files to a new site, download files for security storage
or due to requirements for local storage of files (Please see Microsoft security
https://products.office.com/nb-no/business/office-365-trust-center-welcome?omkt=en-US).
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4.4.8 IFRS 16
You can have better control of registration by adding a cut-off date to the ShareControl Settings
menu. By setting this date the administrator will be able to restrict its users from making changes
that will affect results in accounting periods that have been closed. This includes both entering
new contracts and making changes to existing contracts.
You can choose reporting periods and set the first date the change can be registered. For example,
you can set reporting period date to June 30th 2020 to prevent any changes or leases being
registered before this date, so that the data in the calculation file for half-year report 2020 won’t
be changed.
A choice as to whether or not Mass update CPI or Rate and Log change should be included in the
menu
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Scan buttons for upgrading the app to new version.
Download IQY files with all IFRS 16 data.
4.5 Libraries, folders and files
This chapter describes the library functionality, including folders and files.
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Libraries are found on the left side of the menu and the name can be modified under Settings.
Click to get access.
Like Excel, you can use the funnel ( ) to sort and filter the content. This function is explained
further in chapter 4.5.2. This functionality is helpful when sorting and finding documents.
By clicking , the definition of each metadata appears based on the definition in IFRS 16 and
guidance about how data should be filled in to get correct values in the calculation will also
appear. You can modify and customize definitions under Settings Field descriptions.
Expired contracts are marked in pink. This is checked against the actual date.
4.5.1 Creating contracts (Folders): from draft to publish
Each unique contract needs a separate folder to be able to perform calculations.
Click New item to enter the metadata (Properties) for this folder. Follow the instructions and
register the contract details as required, you can always get help by clicking the question marks.
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After you finish entering the metadata (Properties) for the folder, you have two choices: Save
draft and Save and publish.
If you’re confident that the data that you entered is correct, which means there won't be any
correction of data that will affect the result of calculation (Data, such as number of payments per
year, Start date or End date of lease payments, Discount rate, etc.), you can click the Save and
publish button.
After the folder is published, you can change data that won't affect the calculation for any
published folder via Edit (Data, such as Title, General information, Property details, Company,
Department, etc.). You can’t correct any data that affects the calculation via Edit. Correction of
error of a published contract's original data that is used in an IFRS 16 calculation in the initial
registration can only be done by rolling back to the previous versions. Please read chapter 15 for
guidance. Changes of data that will affect the calculation to the published folder, such as CPI
adjustment, execution of options, etc. can be done through Log other change.
Click a published folder and then click the Edit or the Log change button to edit or log changes to
an existing published folder. Please read Chapter 5 to get tips for creating folders and chapter 13
and 14 for more information about log changes.
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If you’re not confident that the data that you entered is correct, which means you might make
some corrections to data later that will affect the result of calculation, you can click the Save draft
button.
As a published folder, changes of parameters that affect the IFRS 16 calculation can only be done
through the change log, so that the net present value of the changes is recorded at the date of
the change. However, all elements of the draft contract can be changed. You can change all the
existing data and add new data to an existing draft folder by clicking the folder and then clicking
Edit.
You can make changes to the data as many times as you want by editing the folder and saving it
as draft. When you’re confident that there’ll be no changes to the original data that will affect the
calculation, you can publish it, either by clicking the folder and then clicking Publish or by clicking
Save and publish (In the submenu of Save) after you click Edit to make changes.
When a contract is saved as a draft, it will appear as a draft in SharePoint with a draft icon " ".
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You don’t have to publish a contract to include it in the calculation. A draft contract is included in
the calculation file (Marked in grey color and with a draft icon ), so you can check its calculation
result before you publish the contract.
We recommend that all the new IFRS 16 contracts are stored as drafts. Since all the drafts are
included in the calculation and you can't change any contracts that have been audited/ reported
without using Log change, it means that if the drafts are audited/ reported, you must publish
them and any changes you will make to them must be done via Log change.
4.5.2 Using the funnel (filtering and sorting by metadata/columns )
Click on to see the following choices:
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The choices vary, depending on the type of metadata/ column. The text-field allows you to type
optional text and, if there is a dropdown menu, you’ll see the following picture:
You can select the options you want, and use the Select all or the Remove all choices button to
quickly select or unselect your choices.
The Show button applies your selections. Remove removes the filtering for that column. Remove
all removes all filtering for all columns. The filter functionality will be inactive when you leave a
library. An active filter will be shown by a yellow funnel.
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4.5.3 Folders options (Cogwheel)
If you click the cogwheel for folders, the following menu appears:
● You can create a new file in Word, Excel, PowerPoint, or OneNote by clicking Create a new
document. It requires that you write the name of the file and select the type of file you want to
create. The file is immediately shown in the folder.
● You can upload files from your computer/ server by clicking Upload files. You can use File
Selection or drag and drop the files from your computer or emails to this window. See more
information here:
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● Properties shows the properties of a folder and its metadata. When selecting Properties, a
window opens. Click Edit if you want to change the name or metadata. You’ll get the same window
by clicking on the folder name. The data for IFRS 16 is described below.
● You can copy a folder with metadata, including files in the folder, by clicking Copy with files.
This is useful for a more efficient registration. In the next menu you can choose the files to copy
and edit the file name before copying by clicking .
● Copy without files can be used for copying folders and metadata, but not the files attached to
the folder. Data that is unique to an IFRS 16 contract or hidden under Settings is not copied to a
new contract. This is to avoid copying irrelevant data.
Examples of data that’s not copied:
• Business combination date
• Fixed regulation
• One-time payments
• Residual value guarantee
• Other information about the right of use asset
• Termination
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● Move folder allows you to move a folder with files to a different library. Please note that if the
library has different metadata, this will leave the field blank or make it invisible.
Choose the library you want to move the file to in this menu.
The Move function is found under the cogwheel and is useful when you want to clean up your
library by moving expired contracts to a separate library or by reorganizing your libraries.
Moving a contract from one library to another involves a check of the metadata. This is to ensure
that you don’t transfer a contract from one library with a specific metadata set to another library
with a different metadata set, which will result in data loss. Below is an overview of the different
messages that can appear when you move a contract.
If this green message appears, the destination library is ok.
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If the metadata is significantly different, you’ll get the following yellow message (See illustration
below). In this case, you’re not allowed to move the contract to the selected library. This is to
prevent data loss.
You need to either select a library with similar metadata or establish a new library with similar
metadata. Under the Library settings you can see the category for the library you want to move
from and establish a library with the same metadata.
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If there’s information in the contract that needs to be modified or deleted before you move the
contract, the message will look as illustrated below. The folder can’t be moved before the Data
field is deleted. In the example below, the folder you suggested moving to didn’t have the General
information or Property details.
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● Lock allows you to prevent folders from being edited. Read access will still apply for users. This
option is changed to Unlock if the folder is already locked. Only administrators and site owners
can access the Lock and Unlock functionality.
● Create task (or task status) allows you to create a task related to a specific folder, set an optional
due date and assign it to another user of ShareControl.
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Tasks are shown on the front page for the individual user:
Please note that the Power Automate integration is available in the 2021 version. This gives
notifications via email and in Teams and provide a more comprehensive notification process.
See our separate guide.
4.5.4 Files options (Cogwheel)
If you click the cogwheel for files, the following menu appears:
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● Open file opens the file
● Download file downloads the file to your computer or server.
● Copy link to file gives you access to the URL address of the file.
● Copy to current folder provides you with a copy of the file to the same folder. You change the
filename in this submenu:
● Properties accesses the file name and you can change the file name here.
● Delete deletes the document (You can restore it by clicking the recycle bin).
Quick view of documents: Behind each folder and file, you’ll find three dots. Click to quickly share
the folder and see the file simultaneously. You can also open the Version log to access earlier
versions of the documents.
4.5.5 Uploading documents
Upload files allows you to upload one or several documents.
If you receive documents as attachments in emails and want to upload them to a folder, you can
drag the files directly from an e-mail to a SharePoint folder.
If you want to use the drag-and-drop method when uploading, open Upload files and drag the
files you want to upload to this window.
We recommend having a descriptive filename to understand the content of the file and to be able
to search for the document.
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4.5.6 Locking folders and documents
When folders and documents are completed (For example, when all data input is completed), we
recommend locking them to avoid unintended edits or deletion.
Locked documents/ folders will be orange. Only the administrator can unlock the folders and open
for editing. Locking documents is an important control functionality to ensure that you have the
final version of a document (E.g. documents used as basis for the annual accounts).
We also recommend that you use this functionality, even if you are your own administrator, so
you can easily see what documents are finished.
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4.5.7 Sharing specific documents
SharePoint allows you to share documents with others, including external users and those who
don’t normally have access to the Site. (See Installation manual chapter 6 for more information
about site sharing.)
Sharing documents can be done directly in the Office menu for Word, Excel, PowerPoint, etc.
Share documents by using options under File. This sharing functionality is SharePoint’s ability to
share Sites with others.
All users will work on the same document. It’s not necessary to send the document by e-mail, as
the receiver will get a link to the document. You can also send the document directly by e-mail.
4.5.8 SharePoint and file menus in Word, Excel and PowerPoint
You can access the files directly from Word, Excel and PowerPoint in the Last documents menu.
You don’t need to open the ShareControl add-in to get access.
4.5.9 Mobile access
SharePoint has launched an app to mobile phones (See the App Store). Your contracts can be
accessed through your mobile device based on a search of file names. We therefore encourage
you to use descriptive file names for contracts that you upload.
4.6 Processing tasks
Use the task function to assign tasks to others and process tasks that others have assigned to you.
Task processing can be viewed on the front page of the ShareControl add-in.
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Your tasks contains an overview of all tasks assigned to you.
Tasks created by you gives an overview of all tasks you have assigned to others.
Other tasks shows the ones you’re not involved with, and where you can find them.
When you have selected a task, you’ll see its details to the right.
4.6.1 Task details on the frontpage
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Documents displays the task folder(s) and its related documents.
Task shows all tasks processed in that folder. The most recent task will be on the top, with older
and completed tasks below.
The task status is shown beside the name of the person responsible. The initial message is shown
immediately, and no feedback is given. Click the speech bubble to add feedback, then select
Approve, Prepared, Decline or Not started to set the task status.
Click Show additional options to get Task administration. Then change the assigner, the assigned,
the title of the task, the deadline, and delete the task. When you Approve or Decline the most
recent task, you can create a New task.
4.6.2 Assigning tasks
Click the task icon to start a new task.
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Write the title of a task on the first line. Assign it to a person by entering an email address. Set a
due date and describe the task.
The task will appear on the front line for both you and the people you assign tasks to.
4.6.3 Task status on folders
All folders with a task assigned show the last task as a colored suitcase.
The color of the suitcase indicates the status of the task.
If the task icon has no color, it’s possible to create a new task. If the task icon is colored, you get
the details of the existing task by clicking on the suitcase.
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5. Upload contracts using SharePoint
Please see the section below for guidance on how to complete information. In the SharePoint
registration, contracts are uploaded directly in SharePoint and not by using the excel spreadsheet.
But the information is the same. The excel upload will register all the data in SharePoint after the
excel spreadsheet are uploaded.
Click on the preferred library on the left side, then click on new item to get a blank schedule:
Each unique contract needs a separate folder to be able to perform calculations.
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One unique lease needs one folder to do a separate calculation, but leases can of course be
combined to follow the portfolio application in IFRS 16 B1 or be combined as described in B2 (We
also offer separate solutions for car leases, based on input from a lessor).
By clicking on the different sections, you will get further guidance. You can also click on the
question mark. An explanation of information to be included in each field is described in the
attachment.
We recommend using the copy function to copy information from an existing folder, for
consistency in the registration of metadata.
5.1 Tips for creating folders
Once you have established the libraries you need and entered metadata, you can create folders
and upload documents. Consider the following when creating folders:
• One unique contract requires one folder; a subcontract will normally also require a
separate folder to include separate data for the DCF (Discounted cash flow) calculation. It
can be combined with the original contract, but the metadata needs to cover both
contracts in that case.
• Don’t upload your complete contract archive before you test the calculation. If fields are
erroneously entered, they need to be manually edited.
• We recommend uploading some contracts and testing the calculation before deciding
what structure fits your company best.
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• Folders can be copied and documents and metadata can be reused, such as different
contracts from the same lessee. By using the copy function, you’ll make the registration
process more efficient. It also helps you to understand the data that is to be included in
each cell and to do the work consistently.
• The metadata that must be entered for each contract to be able to perform calculations
are marked in color. These need to be complete before the metadata is saved.
Company and Department must be entered in order to sort by companies and department. This
can be important for integration with your accounting system. If other data fields are required,
we can add those.
6. Upload contracts using the excel template
To collect all data and get consistent input, the excel template is used to collect data.
You’ll find user guidance in the template (Separate sheet). The input will be organized for
individual groups to process.
The metadata is defined in the spreadsheet. When you complete these, they’ll be available in the
drop-down menu.
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The rows marked in red are mandatory. There’s a user guidance in a separate sheet described
below:
Title
In the calculation model, this is the name that identifies the contract and can only be about 20
characters long. If the name is longer, the last characters are deleted. For example, avoid writing
a "rent", "lease" at the beginning, but write instead, “Storgata 20, Parkveien 3”, etc. It’s
unnecessary to write the department- or the company name as they are registered separately.
Discount rate
The Discount rate category can be entered by selecting among the categories that you’ve defined
under the Metadata sheet. Categories of discount rates can be based on geography, rental period
and underlying asset. Please note that the Discount rate are normally not changed during the
lease term unless there is a change in the lease.
Pre-paid or post-paid lease payments
This will follow the payment pattern. Pre-paid payments are used for contracts (Most contracts)
where payments are made in advance, and post-paid payments are used for contracts where the
payments are at the end of the period. For pre-payments leases, interest will be calculated at the
beginning of each period. The last period will therefore have no interest.
Does the lease payment occur at the end of the previous month?
Answer Yes if the payment is actually made during the month before the lease period. The same
way the payment for the first quarter is made in December the year before. This will shift the
interest and depreciations to the following month, but reduces the lease liability in the month the
payment is made. The lease period is set to the period that the lease payment covers. For
example, the lease payment for a new lease from January to March is paid in December. The start
date of the lease period should be January 1, and by answering Yes to the question, the instalment
is made in December.
Use daily rates?
This function is used for payments that is based on daily rates and the periodic payments depend
on the number of days in the month.
Information measuring the right-of-use asset
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These fields are used to enter a correction of the value of the ROU asset. This will normally not be
relevant in connection to the implementation of IFRS 16, as this results in a capitalization with
subsequent expense of previously recognized costs. For contracts entered after January 1st 2019,
these costs described in IFRS 16.24 are required to be capitalized.
Asset removal obligation: Entering values here is added to the value of the right of use asset and
should be the discounted value. The costs of dismantling and removing the item and restoring the
site on which it’s located must therefore be adjusted for inflation until this time. Be aware that
this is not a new provision under IFRS 16, but a coordination with the provisions of IAS 16.16 (c).
Impairment of ROU asset and Other adjustments of ROU assets
These options are also available under log lease changes and will affect the value of the ROU asset
the date of the change. An example is, an impairment of the ROU assets during the lease period
that needs to be registered here or other changes, like a partial reduction of the ROU asset, due
to modifications of the lease term.
Lease Payments
There are several elements that need to be considered:
What is the payment for the rental elements? It’s not necessarily the amount stated in the lease
contract or what’s paid on the last invoice. Payment to the lessor may also include more than the
actual rental element, such as property tax, lessor administration costs and insurance. In these
cases, the payment will be divided between rent and non-rent elements.
What is variable and fixed rent? It’s only the fixed rent that shall be included in the lease
obligation. For example, revenue -based rent is not included, but a guaranteed minimum rent will
be a fixed rent.
Is there an identified asset? A lease can be part of a service agreement. See guidance in IFRS 16
B9-B39 identify a lease.
The length of the lease. Understanding the length of the lease may have a significant impact on
the liability and the ROU asset in the balance sheet. Examples are options for renewal or a right
to termination before expiration of the agreement. In these cases, the lessee must assess the
period to be included in the calculation.
Non-lease components. The lessee may choose to include non-rental non-lease in measuring the
lease liability. Our experience, however, is that for property rentals, non-lease elements and
coverage of landlord activities and expenses will often be variable. This is why they’re not included
in the minimum lease payment.
Option to extend lease period?
We recommend that all options to extend is included for overview. It also allows for the option
to be included at a later time, if currently it’s not reasonably certain that the option will be
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exercised. To exercise an option previously not included, the log lease change functions need to
be used. (There’s no benefit to include options for extension. This only increases the lease liability
and the ROU asset without affecting depreciation significantly).
Date of termination
This field is not required for implementation. Leases that are terminated will not normally be
included (If the remaining rental period is less than 12 months). If a terminated lease shall be
included in the calculation, the End date of lease payment define the period for the lease. A lease
that’s terminated after implementation of the standard, use the termination function under Log
other change.
Notification Dates
There are several notification dates in the solution that we recommend using as a reminder, when
an option for extension or purchase of underlying asset is to be exercised or when a termination
right may be reversed. The date to be used is usually before the date of exercise of the option.
The notification will appear on the front page.
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The first index regulation that should be noted is regulation after January 1st 2019. Remember
that the index regulation on January 1st 2019 will be included in the minimum lease payment.
After the contracts have been uploaded in SharePoint, based on the template, the contract and
the last invoice is recommended to be uploaded, for access, review and audit.
Please note that we have an integration with Power Automate in the 2021 version and refer to
the separate Power Automate guidance. You will still have notification on the front page.
6.1 Register start date and end date of lease payment correctly
The start date and the end date of lease payments are some of the factors that determine your
lease’s cash flow, which is one of the main contributors to the lease’s liability. Therefore, it’s
important to register the start date of lease payment and the end date of lease payment correctly
in our solution, to reflect the real cash flow of the lease contract payments.
6.1.1 Actual lease payment pattern
To register the start- and end date of lease payments correctly, you need find out the actual cash
flow pattern for the lease contract. We recommend that you check the lease contract or your
recent invoices of the lease payments to find out when and for which period the leases are to be
paid. After you have established the payment pattern for a lease, you can register the start- and
end date of lease payments accordingly. The payment pattern needs to be correct for
reconciliation to invoices and accruals in your accounting records.
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6.1.2 Registers cash flow based on a date
The calculation model registers cash flow based on date, frequency and amount, as opposed to direct cash flow registration (i.e. a list of dates and amounts). This makes registering simple and regular cash flows easier. There are, however, certain caveats you must pay attention to when it comes to irregular payments or date choices. The most common of these is that the end date is always inclusive, meaning that if a lease starts on January 1st 2020 and ends on January 1st 2021, the calculation considers this a 1 year and 1 day long lease, not a 1 year lease. The number of payments that occur are based on the number of months in a given payment period, rounded up, and will for a monthly paid lease with these dates result in 13 payments and not 12, as one might expect. If the lease is in fact a 1 year and 1 day lease with 12 payments, one can either register a second payment period to include the final day with a payment of 0, or one can set the depreciation end date to be 1 day later than the end of the lease payments.
6.1.3 Check calculation warnings
To make the calculation work correctly, the application will check start- and end dates and report
a warning if the dates are not related. For example, if a contract starts in January and has quarterly
lease payments, then the calculation model will show a warning if the end date is in months other
than March, June, September or December. The contract will then appear on a warning list and
you must enter the correct date for the contract to be in accordance with the payment pattern.
The calculation model also gives a warning when the lease period is a couple of years (and
months) and one or two or three days.
You can check the lease payment pattern of each contract listed in the warnings tab. And then, if
necessary, you can change the start- or end date of the lease payments in SharePoint to get the
correct lease payment pattern.
7. Rent free periods/ periods with different lease payments/ other non-lease
payments
7.1 Rent free periods/ periods with different lease payments
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A contract where rent is unpaid, or paid in a lower amount, in a period after ROU asset are
available for use by a lessee, a rent free period or a period with low rent is registered as follows
(Please remember that you shall ONLY register periods after January 1st 2019):
In this example, the contract started from January 1st 2019. It has a rent-free period until June
30th 2019 and then continue with lease payment 170,000 each quarter until December 31st 2025,
which is the end date of the contract. This can also be done by using the field for the start date
for depreciation.
In this calculation, interest will be calculated and added to the lease liability in the rent-free
period. Please note that the lease liability will increase in the rent-free period.
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Please note that the rent free period is only relevant after the ROU asset is available. If a contract
is entered for a future period and the ROU asset is not available, the lease liability should not be
recognized before the underlying asset is available. See IFRS 16.22.
7.2 Other non-lease payments
In the 2021 version, you can now register other lease payments, such as variable payments that
are not fixed lease payments of the underlying asset. Examples are; service cost in a contract for
the rent of a building (Electricity, water, cleaning, janitor services, etc.) or service cost for
machinery, and variable rent, such as cost for a crew on a ship, fuel, service, etc.
To use this function, you need to turn on this feature under Settings, go to the IFRS 16 tab and
click on Show additional options.
Select Show for Other non-lease payments.
The question, "Does the lease have other payments?” will then turn up. Click Yes and fill in the
amount. We recommend that you use the same period for the lease payment, so that the
amounts can be index regulated, going forward.
In the calculation file, the amounts will be disclosed under the Other lease payments headline for
the individual contracts.
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In the Menu sheet, the figures will turn up if you choose Other non-lease payments as a column.
7.3 Index regulation of other non-lease payments
Other non-lease payments can be index regulated together with the lease payments in the Index
regulation function.
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You can also use the Mass index regulation function where other non-lease payments will turn
up as a separate column.
8. Foreign currency exchange
At the date of implementation, the exchange rate at that date should be used to measure lease
liability and ROU asset.
IFRS 16 doesn’t provide specifics for foreign exchange effect. Foreign currency exchange
differences follow IAS 21 consistently with other financial liabilities. A lessee’s lease liability is a
monetary item and consequently, if denominated in a foreign currency, is required to be
remeasured by using closing exchange rates at the end of each reporting period. (BC 196 Foreign
currency exchange) (The Basis of Conclusion from IFRS 16)
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The exchange differences, relating to lease liabilities denominated in a foreign currency, should
be recognized in profit or loss.
The value of the ROU asset doesn’t have any effect on the change in foreign currency and should
be recognized to the exchange rate at the date of the transaction (IAS 21.23) or at the rate of the
initial implementation. In ShareControl, all contracts are kept in the currency they are registered.
8.1 Foreign entities
We recommend using the foreign currency translation function in your consolidation system to
handle different currencies. This means that the input for Share Control should be recorded in the
reporting entities, based on their functional currencies. This can be handled by the accounting
integration function (Additional product).
In the recently released 2020 version, you can choose between calculating contracts in foreign
currency at the closing exchange rate or to the average exchange rate. This can be found in the
Currency Settings section of Application settings, which is found on the menu page. If Use closing
currency rates only is unchecked, as shown below, then the calculation will use average exchange
rates for income statement captions.
You can choose between exchange rates from Norges Bank or Sveriges Riksbank.
The calculation will now automatically convert income statement captions (Interest and
depreciation) to the average rate for the actual month and balance sheet captions to the closing
rate for the chosen period. The opening balance will be converted in accordance with the closing
exchange rate for the prior period. All future payments, as in footnotes or future payments in
forecast, is translated in accordance with the closing exchange rate. The exchange rates follow
the date selector, meaning that if the end date is set to March, it uses the exchange rate at the
end March as the closing rate, if available. Forecasting and budget uses the same currency table
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as the other summary sheets. Thus, if you set the main lookup to be 2020 and do a forecast for
2022, then it will be converted in accordance with the closing exchange rate for 2020. It’s
therefore important to set the appropriate Menu lookup period before generating the forecast.
The exchange rate difference will be automatically calculated, in the reconciliation spreadsheet,
as well as, in the footnote disclosure, for the liability, as well as, the right of use asset. This is
useful for currency translation for foreign operation. For individual contracts, please see below.
The currency effects are shown as illustrated below in the footnote.
They are also shown in the complete fixed asset footnote (Pro-version).
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To review the exchange rates used, click the Edit currency table button on the menu page, which
shows the table of exchange rates used (In this example the exchange rates are retrieved from
Norges Bank).
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You can also review all or some of the foreign exchange rate formulas in the spreadsheet, by using
the setting below. Show some means that only changes and balance sheet captions will have the
conversion shown as an Excel formula, while all other results will be pre-calculated.
Finally, the amount in other comprehensive income (Net of currency effects on Lease liability
and Right of use asset) is shown under other comprehensive income in the tab note disclosure.
8.2 Contract currencies different from the entity’s functional currency
If a lease contract is entered in a foreign currency other than the entities functional currency, the
ROU asset is required to be recorded, applied to the foreign currency amount, the spot exchange
rate between the functional currency and the foreign currency, at the date of the transaction (IAS
21.21). In subsequent periods, non-monetary items that are measured in terms of historical cost
in a foreign currency shall be translated using the exchange rate at the date of the transaction
(IAS 21.23). Subsequent changes in the ROU asset, such as index regulation, extend of lease
periods, etc. shall be measured according to the spot exchange rate between the functional
currency and the foreign currency at the date of the transaction.
In the 2020/21 version of ShareControl, this functionality is available if you use this option under
Information about the lease liability, by answering Yes to this question. Please note that this
option needs to be turned on under Settings to be disclosed. See below.
If the lease currency is in USD and the functional currencies of the company that held the lease
set EUR in this field. This will be shown as below (The exchange rate on January 1st 2019 is set to
0.9 in the example below)
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Please don’t use this field if you want to translate a foreign operation. See section 8.1. if that’s
the case.
Set the exchange rate at the commencement of the lease (Or set it to January 1st 2019 if the lease
was there at the implementation of IFRS 16). If you want to use the exact same exchange rate as
in the calculation sheet, look up the exchange rate from the exchange rate table. Please note that
the calculation uses monthly average exchange rates and not spot rates when converting monthly
changes of lease liability and right-of-use asset. So if you want the same exchange rate, you have
to use the average rate for the month of the transaction.
The right of use asset is now kept at the exchange rate, registered, and you will see that for the
individual contracts in the calculation file.
Subsequent changes in the lease need to be registered at the exchange rate at the date of change.
You need to register the exchange rate for each change in the contract, like rate adjustment,
exercise of an option, etc. In the illustration below, we have made the index adjustment with an
exchange rate USD to EUR at 0.89 on January 1st 2020.
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In the calculation, this can be viewed as follows:
The change in ROU asset in EUR is the USD change of USD 52.073 * 0,89 = 46.355 and the ROU is
kept in the EUR functional currency.
The currency effects of the translation of the lease liability from the functional currency to the
reporting currency is shown in note disclosure under Amounts recognized in profit and loss as
foreign currency effects. This amount should be part of the profit and loss statement and not in
other comprehensive income.
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In the case where the reporting (Lookup) currency is the same as the functional currency of the
lease, the Foreign currency effect will show the exchange effects on the lease liability only, as
there are none for the right-of-use asset. In the case where someone at the group level has a
foreign company that has a lease in a third currency, there will be a split between the foreign
currency effects and the transaction differences on net investments in foreign operations. This
split is calculated using the average of the average exchange rates for the period. This is easiest
shown through an example:
Assume a group in Norway (Reporting in NOK) owns a company in Germany (Reporting in EUR)
that has a lease in USD. In this case, the liability is in USD, while the right-of-use asset is in EUR,
using the historic exchange rates. If the group in Norway generates the note disclosures in NOK,
the two posts are calculated in the following way:
Foreign currency effects (NOK)
= −Liability currency effect (USD → EUR) × Average rate (EUR → NOK),
Transaction differences (NOK)
= RoU-asset currency effect (EUR → NOK)
− Liability currency effect (USD → NOK) − Foreign currency effects (NOK).
9. Business combination (IFRS 3. 28 A and B)
In a business combination, the acquirer shall measure the lease liability at the present value of
the remaining lease payments (As defined in IFRS 16), as if the acquired lease were a new lease
at the acquisition date. The acquirer shall measure the right-of-use asset in the same amount as
the lease liability, adjusted to reflect favorable or unfavorable terms of the lease, compared to
market terms.
In a business combination, the acquisition date for each lease needs to be identified and
registered under the IFRS 16 scope.
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The start date of the IFRS 16 calculation will in this case be the date of the registered acquisition.
If you need that date for other purposes, you can register the actual start date of the contract
under the section information about the lease liability.
In the calculation file, the information will appear as follows:
10. Sub lease and use of the solution as a lessor (Pro version)
In the Share Control pro version, you can register sub lease contracts, both as financial- and as
operating lease contracts, as a lessor.
Please note that the IASB decided that, when classifying a sublease, an intermediate lessor should
evaluate the lease by reference to the right-of-use asset arising from the head lease and not by
reference to the underlying asset. A classification of a sublease as a financial lease depends on
the sub lease terms, compared with the head lease.
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To register a contract as a lessor, you always need to register either a lease agreement or an asset
on the balance that you keep as a lessor. You also need to decide if the lease contract qualifies as
a financial lease contract (A requirement for offsetting a lease contract as a lessee) or as an
operating lease contract that’s a registration for a footnote disclosure. See IFRS 16.61.
After you’ve made a decision about the lease being operating or financial, you need to decide on
a head lease or an asset.
The headlease must be registered before you make the identification, and you can now choose
from all leases registered on this site.
Choosing an asset (Not registered in ShareControl), use a description of the asset that’s leased as
shown in the example below.
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By identifying a head lease or an asset, the contract is registered as a lessor contract and the lease
liability is replaced by a lease receivable. On the menu site, you can see the result as shown below.
In the footnote disclosure, there are separate columns for lease receivables, both financial and
operating.
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10.1 Offset ROU asset against lease receivable
In case the intermediate lessor recognizes the net investment in the sublease (A receivable) rather
than a right-of-use asset, you can proceed as follows (See IFRS 16 BC 233).
Calculate the amount that should be offset and register the amount here:
The amount will be included in the gain and loss calculation and reduce the book value of the ROU
asset.
11. Metadata (Contract data) for IFRS 16
There are descriptions of different metadata in the IFRS 16 add-in (Click on the question mark).
The metadata required to perform an IFRS 16 calculation is marked in red in the add-in. This needs
to be completed before you can save the registration.
In the template, certain registration rules are implemented to avoid incorrect registration.
Please note the following: Lease payment data should only cover periods from January 1st 2019
and forward. If you consider implementation option IFRS 16, C8 (i) (modified retrospectively
implementation), historical data will be changed in excel, but the date of the start date lease
payments needs to be correct.
Lease liability
Title We recommend that you use a descriptive title to make it easy to sort and search later. The title is also used in the calculation for identifying individual contracts.
Change date (Log change)
The date the net present value of the change is recorded.
Change comment (Log change)
Comment to the change registered. We recommend making a description for easier overview of changes and roll back to previous versions.
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General information
Tenant Lease holder’s legal name.
Landlord Legal name.
Property detail
Address Address where the asset is being used.
Postal code Postcode/ ZIP Code
Country Country where the asset is being used.
IFRS 16 scope
IFRS 16 lease liability calculation?
A lessee may elect not to apply the requirements if it's (a) a short-term lease (Less than 12 months), or (b) leases for which the underlying asset is of low value. If the answer is no, please classify the lease as a short-term lease or a low value lease in footnote disclosures. If one of these exceptions is relevant, answer no.
Is it a short-term lease?
A lease that, at the commencement date, has a lease term of 12 months or less. These contracts can be included for information and footnote disclosures. A lease that contains a purchase option is not a short-term lease. Information about payment of short-term lease is required in the footnote disclosures.
Is it a low asset value lease?
If the ROU asset (The right-of-use asset) is of low value. These contracts can be included for information and footnote disclosures. See IFRS 16 B3-B8 for guidance.
Is the lease a financial lease?
As a lessee, this field is to distinguish between finance leases based on the previous IAS 17, if that’s relevant for your local Gaap accounting. As a lessor, you distinguish between financial leases and operational leases using this question. See IFRS 16.61 for more information.
Is the lease acquired through a business combination?
The acquirer shall measure the lease liability at the present value of the remaining lease payments (As defined in IFRS 16) as if the acquired lease were a new lease at the acquisition date. The acquirer shall measure the right-of-use asset at the same amount as the lease liability, adjusted to reflect favorable or unfavorable terms of the lease when compared to market terms.
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Date of acquisition The date on which the acquirer obtains control of the acquiree is generally the date on which the acquirer legally transfers the consideration, acquires the assets and assumes the liabilities of the acquiree—the closing date. Enter the acquisition date for each individual lease contract, and the IFRS 16 calculation will use this date to measure the lease liability and ROU asset.
Is the lease a sublease?
Answer Yes if the entity provides the right to use an underlying asset for a period of time in exchange for consideration (Lessor).
Headlease or asset
If this is a sublease, you can select the headlease using this field. This will make calculations to consider this as part of the headlease.
Discount rate
Discount rate The lease payments shall be discounted, using the interest rate implicit in the lease, if that rate can be readily determined. If that rate can’t be readily determined, the lessee shall use the lessee’s incremental borrowing rate. If the lease payments are remeasured, the discount rate should be revised.
Discount rate category
Use this field to choose between different interest rates that a lessee would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The different categories need to be entered under Settings.
Information for measuring the Right of Use assets
Lease incentives Payments made by a lessor to a lessee associated with a lease, or the reimbursement or assumption by a lessor of the costs of a lessee, will reduce the value of the ROU Asset.
Initial direct cost Incremental costs of obtaining a lease that would not have been incurred if the lease had not been obtained, except for such costs incurred by a manufacturer or dealer lessor in connection with a finance lease, will be added to the value of the ROU Asset components and instead account for each lease component and any associated non-lease components as a single lease component (IFRS 16.15). A lessee shall not apply this practical expedient to embedded derivatives that meet the criteria in paragraph 4.3.3 of IFRS 9 Financial Instruments.
Residual value The model uses the contract period for the useful life. If the useful life should be expanded, in case of an exercise of a purchase option, use the residual value to adjust depreciations.
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Does the lease contain an asset removal obligation?
An obligation for the lessee to dismantle and remove the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.
Asset removal obligation
An estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease, unless those costs are incurred to produce inventories. The lessee incurs the obligation for those costs either at the commencement date or as a consequence of having used the underlying asset during a particular period. Please note that this obligation is already required to be included in the statement of financial position. If this obligation is already in the statement of financial position, consider setting the value to 0. The net present value should be entered here.
Asset removal obligation discount rate
Discount rate used for the calculation of net present value of the asset removal obligation. For information purposes only.
Include asset removal obligation in the calculations?
If Yes, then the value entered is added to the right of use asset at the beginning of the lease period (the net present value should be used).
Shall the carrying amount of the ROU asset be recognized as if the Standard had been applied since the Commencement date?
If Yes, a data filed for correction of the difference of the ROU asset January 1st 2019 and Lease liability January 1st 2019 will appear. To be used if alternative C8 (b) (i) is used.
Implementation correction of the ROU asset
The field is used to correct the ROU asset if Share Control IFRS 16 solution is implemented after the implementation of IFRS 16 January 1st 2019
Impairment of ROU asset
Impairment charge of the ROU asset, based on IAS 36.
Other adjustments of ROU assets
An example is, decrease in carrying amount of the ROU asset, as described in IFRS 16.46.
Derecognition of ROU asset, due to sublease
Is used to offset headlease and sublease under IFRS 16. The amount registered here will reduce the Right of use asset against the lease receivable.
Start date of depreciations
Register a start date of deprecations if it’s different from the start date of the lease (If you don’t register a date, it’s automatically set to the start date of the lease). This can also be registered as a change to pause depreciations in the middle of the useful life of the ROU asset.
End date of depreciations
Register an end date of deprecations if it’s different from the end date of the lease (If you don’t register a date, it’s automatically set to the end date of the lease, included option periods that are reasonably certain to be exercised).
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Information about the lease liability
Lease category The lease category is used for footnote disclosure ROU Asset. The default setting is based on IAS 16.
Lease Contract ID Description of contract (E.g. contract ID or supplier contract number in order) to be able to track back to the agreement, if required.
Lessor Name of lessor. Helps organize and filter leases.
Currency The currency of the lease contract.
Is the lease currency different from the entity's functional currency?
If you have a lease contract in a currency different from the functional currency, answer Yes and register the entity’s currency. The contract must always be registered in the contract currency.
Entity currency The functional currency of the entity. If this is not provided, it will use the Company Currency instead, if it’s registered.
Entity currency exchange rate
The exchange rate to be used at the start of the lease and subsequent changes (Exchange rate from contract currency to functional currency).
Is the lease pre-paid? If Yes, interest will be calculated and prepaid at the beginning of each period. The last period will therefore have no interest.
Does the lease payment occur at the end of the previous month?
Click Yes for leases where the payment is the month before the actual lease period, to register the instalment the period is actually paid. An example is, a payment of rent in December for the first quarter next year.
Use daily rates? If the payments are based on daily rates. Instalment and interest will then be calculated based on the actual number of days in a month.
Lease payments The minimum fixed lease payments over the lease term, as well as, registration of extension options. If the fixed lease payments vary over the lease term and don’t follow a regular pattern, then all amounts need to be separately registered. The amounts are updated when a change in payments, due to an index or rate, is registered.
Start
Start date of the lease payment period, which also determines the payment dates for the entire period. For the first payment period, this is the start date of the lease. The start of IFRS 16 is the latest of the lease start date, the IFRS 16 implementation date or the acquisition date in a business combination.
End End date of the lease payment period. Option periods should be registered separately for footnote disclosure. If the lease is terminated, then the termination date is the end date for the lease.
Frequency The payment pattern/ frequency is specified as the number of months between each payment. Monthly: 1, quarterly: 3, yearly: 12, half-year: 6, every other year: 24, and so on.
Amount
Minimum lease payments for the payment period. A rent-free period can be registered by adding a payment period that cover this interval with an amount of 0. For leases with a fixed adjustment, the amount can be left blank, to indicate that it should continue the pattern. This is useful when adding extension options to such leases.
Option Please check the box if the payment period is an option to extend the lease contract. We recommend registering option periods for analysis
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and footnote disclosure. If you already have exercised the option at lease registration, we recommend not checking this box and simply including the period in the lease term.
Unused Check this box for extension options that are considered "not reasonably certain to be exercised". The option period will not be included in the lease liability. However, it will be included as information in the sensitivity analysis in the footnote.
Option comment Use this descriptive filed to explain what event triggered the exercise of the option, such as, signing the contract to extend the lease period or notification to the lessor to extend the lease period.
Option notification date
Enter the date you wish to appear on the overview as a reminder for the closest option period.
Comments to minimum lease payment
Enter comments about evaluation, assumptions, etc.
Does the lease have other payments?
Answer yes to register variable lease payments like service cost, electricity, janitor, etc. Will be included as information in the calculation file.
One-time payments To be used for a one-time payment during the lease term, enter the date (in contract currency) and date for the payment
Non-lease component
For a contract that contains a lease component and non-lease components, a lessee shall allocate the consideration in the contract to each lease component, on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components. (IFRS 16.13). As a practical expedient, a lessee may elect, by class of underlying asset, not to separate non-lease components from lease components, and instead account for each lease component and any associated non-lease components as a single lease component (IFRS 16.15). A lessee shall not apply this practical expedient to embedded derivatives that meet the criteria in paragraph 4.3.3 of IFRS 9 Financial Instruments. This is just for information purposes.
Non-lease component description
Describe the non-lease component.
Does the minimum lease payments include the non-lease component?
Used as information to organize and filter in this field.
Prepayments Any prepayments of the lease liability. This is payments made before or at the date of the start of the lease payments. The value is included in the ROU asset but not in the lease liability. If the prepayment is already in the statement of financial position and depreciated separately, consider not including a value.
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Responsible Enter the name of a department, role, person’s name or e-mail. If you use Power Automate notification this is not relevant
Does the lease have a fixed adjustment?
Answer Yes if the lease contains a fixed adjustment (fixed payments are included in measuring the lease liability). An example is, a yearly CPI adjustment of minimum 1% p.a. 1% is then a fixed adjustment. Remember to set the amount and frequency accordingly, so that the adjustment occurs at the correct intervals with the amount entered.
Fixed adjustment in percentage
A fixed adjustment in percentage. This is added to the fixed payment at the fixed adjustment date and interval.
Fixed adjustment value
A fixed agreed adjustment in amount.
Fixed adjustment date
The date of adjustment starts when it’s included in the calculation. This adjustment is then repeated based on the frequency registered.
Fixed adjustment frequency
Set the frequency of the fixed adjustment as the number of months between adjustments. Use 12 for yearly adjustments, 6 for half-yearly adjustments, 24 for adjustments every other year, and so on.
End date of fixed adjustment
The end date of the fixed adjustment. If not different from the end date of the lease, i.e. the lease is adjusted until the end of the lease, the field can be left empty.
Amount exempt from fixed adjustment
Any fixed amount of the lease payments not to be regulated. For example, if the lease payment is 15,000 where 10,000 are regulated by 5% and the other 5,000 is unregulated, then 5,000 should be registered here.
Estimated residual value guarantee
If a residual value is guaranteed by the lessor, the amount should be included here. This amount will be included in the measurement of lease liability at the commencement day.
Termination, purchase rights and guarantees
Right to terminate? Answer Yes if the contract can be terminated before the end of the registered lease term (as part of the lease contract).
Notification date for termination
Enter the date you wish to appear on the overview as a reminder.
Is the lease contract terminated?
Answer Yes if the contract is terminated before the end of the lease period, either as a modification or as part of the contract (Reassessment).
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Date of termination The date the payment of the lease stops after the lease contract has been terminated.
Termination penalty fee
Penalties for terminating the lease that will be included in the calculation at the date of termination or an earlier date, if that’s agreed.
Date of termination penalty fee
The date of expected payment of the penalty fee.
Purchase option Answer Yes if the lease contract includes an option to purchase the underlying ROU asset.
Notification date for purchase option
Enter the date you wish to appear on the overview as a reminder.
Reasonably certain to purchase?
Answer Yes if it’s reasonably certain that the purchase option will be exercised. The price will then be included in the measurement of the lease liability in the calculations. We recommend entering the same value as a residual value of the right of use asset.
Purchase option price
The nominal amount of the purchase price, which is added to the end of the cash flow in the calculation.
Is the change a lease modification?
A lease modification is a change in scope of a lease, or the consideration for a lease that was not part of its original terms and conditions. For contracts that are terminated as part of the original terms, answer no to this question. Please note that the accounting is different for the two options and we refer to the user manual.
Subsequent measurement of lease liability
Lease based on index or rate?
Variable lease payments that depend on an index or a rate as described in IFRS 16 paragraph 27(b) include, for example, payments linked to a consumer price index, payments linked to a benchmark interest rate (Such as LIBOR) or payments that vary to reflect changes in market rental rates.
Date of next lease adjustment
This date will appear on the overview page as a reminder.
Start date of lease adjustment
Specify the date that should be used to look up the index for the start of this lease.
Base index value If available, set the base index value to be used for CPI adjustments.
Other comments Your other comments on the lease contract, not covered elsewhere.
Date of minimum lease payment change (Log change)
To be used if the net present value effect of the change in a rate or index
is to be recorded on a date prior to the change in the cash flow. Leave
this open if the change is to be recognized on a later date. Changes
registered to the lease payments will take effect at this date instead of
at the change date itself.
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12. Consistency in data and summary of calculation rules
To make a correct calculation, the registration needs to be consistent, and certain rules that are
described below need to be followed. Before data is uploaded in the calculation model,
consistency in data is verified and certain rules are applied.
Dates – Dates in the model need to follow in a subsequent pattern, because we cannot have
overlapping payments in periods. Therefore, we only use end date after the first period. The start
period for subsequent periods is automatically set to the first date after the end date for the
preceding period.
Calculation rules – Certain rules have been applied in the solution and can’t be overruled. Below
is a summary of the rules applied. (Please read the documentation of the calculation for a more
detailed explanation of the calculation rules)
• The liability only concerns itself with complete months, meaning that one can predict
what will happen by ignoring which day of the month something happens on.
• We assume that all payments occur at the first day of each period for pre-paid leases.
• We assume that all payments occur at the last day of each period for post-paid leases and
that the payment occurs at the end of the previous month for shift payments leases.
• The right-of-use asset is depreciated with an equal amount every month, but there are
two exceptions to this:
o If the start of the lease is not the first of the month, it will depreciate by the
number of days remaining in that month
o If the end of the lease is not the last of the month, the amount is depreciated by
the number of days until the end date that month
• If the lease has multiple different payments as part of the contract, the cash flow is
created using multiple payment periods.
• There are quite a few metadata in IFRS 16 that affect either the liability or the right-of-use
asset by a one-time amount, rather than a recurring cash flow, such as prepayments, lease
incentives, initial direct cost, asset removal obligation, etc.
• When it comes to fixed annual adjustments, our calculation never adjusts any initial
payment value set by the user.
13. Adjust index or rate and log other change
After you have completed the opening balance after IFRS 16, we have updated to log lease
changes. A new button appears for each contract:
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Adjust index or rate gives you access to the menu Index or rate adjustments, which is the
adjustment you need most frequently to do for your contracts.
Log other change is for the more complicated adjustments, such as, exercise an option that
previously has not been exercised, lease modification, change in discount rate and termination.
13.1 Adjust index or rate
This is a change that you would register yearly for a contract with index regulation, since IFRS 16
requires you to change the lease liability if there’s a change in future lease payments caused by a
change of an index or rate.
Click Adjust index or rate to make the adjustment to the CPI and discount rate . This function can
be open to all, so that CPI adjustment or change of discount rate can be made by all users.
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Fill in the date for the lease change and edit the lease payment or discount rate (If it’s an
adjustment to discount rate, set the Type of lease adjustment to Interest) from that day and set
the date for the next index adjustment.
Start with the date of the change. This is used to identify the month of the change. If a change
takes effect in January, the change date needs to be in January. Please note that we use full
months, so the change will have a month depreciation and interest in the month of the change.
In case a change happens in the end of a month and the preference is to account for the change
from February, please use February 1st as the date of the change. We recommend setting a date
in the Date of next lease adjustment field to get a reminder for the next adjustment on the front
page.
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Click Save and update the calculation file with the changes by clicking update leases.
You will find the change (Here, January 1st 2021) as shown below, and the depreciations will
change accordingly.
If the change in the cash flow is after the date that the net present value effect of the change is
recorded (Change date), you can use the Date of minimum lease payments change under General
to set the date when the change in the cash flow happens. This is to ensure that changes
registered to the lease payments will take effect at this date instead of at the change date itself.
For example, if you set the change date to January 2021, but the Date of minimum lease
payments change is set to April 2021, the net present value effect of change is recorded on
January 2021, while the change to the fixed payment cash flow happens in April 2021.
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We recommend using the reminder function to set the date for the next index regulation to get
an overview on the front page:
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You can click on the relevant contract in the overview and then click Adjust index or rate or Log
other change (Submenu to Log change) to make an adjustment to the CPI or discount rate.
13.2 Update index or rate for several contracts simultaneously (Mass update)
We recommend for companies that need to regulate many contracts at the same time each year
to use this function. This function is also recommended for companies that regulates several
contracts, based on a rate, such as, discount rate (Financial leases). To have this functionality, the
function needs to be set under Settings: Property and support.
We recommend that the index adjustment is properly registered under Subsequent
measurement of lease liability, so that the correct information appears in the registration
pictures below:
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You can adjust the index or rate for several contracts simultaneously (mass update) by clicking
the Adj. Index or Rate button.
The first registration picture appears as follows:
Start by selecting the libraries that you would like to update. Select other parameters (Companies,
departments, etc.) from the list to sort the contracts you want to update at the same time.
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If you’ve registered the index adjustment date for all contracts, it’ll be easier to sort contracts to
be adjusted based on the same index.
Select Adjustment period that needs to cover the period where you want to include the CPI or
discount rate adjustment.
Then click
The relevant contracts, based on the criteria set above, will appear:
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Set the date the CPI or discount rate adjustments will take effect. In this example, the date is set
to January 1st 2021.
The leases that can be adjusted on this date will appear as a choice with an empty box behind
each lease:
Choose the contracts you want to regulate by clicking the box behind the contracts, or chose all
by clicking the box behind Library:
Click Next page.
Enter the adjustment to the CPI in percentage and click Apply.
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Answer OK to the warning.
The suggested adjustment will appear as follows:
You can now overwrite and adjust the future lease payment for each individual contract by
changing the suggested amount. Please note that in contracts with multiple payment periods or
options, all the periods will appear.
You can exclude contracts by clicking X under the Exclude column.
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If the suggested next adjustment date is not correct,
this can be adjusted either here
or by clicking and then clicking to select the adjustment date for each contract.
When you’re finished, click Next page and then click Save. After you have answered OK to the
warning, the CPI will be adjusted.
To review the result, open the calculation model and click Update leases in the menu page.
We recommend opening the change tab and choose Index or rate adjustment as a filter to review
the relevant changes. Remember that it’s important to set the correct date filter (Lookup periods).
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You can click on each individual contract to review the change.
You can update the discount rate for several chosen contracts simultaneously by clicking
Additional mass adjustments.
Then answer Yes to the question, "Are you adjusting the rate of financial leases?", enter the
updated discount rate in percentage and click Apply.
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Answer OK to the warning.
The updated discounted rate will appear as follows:
You can override and change the discount rate for each individual contract by entering the rate
under the New cell.
When you’re finished, click Next page and then click Save. After you’ve answered OK to the
warning, the discount rate for all the selected contracts will be updated.
Open the calculation model and click Update leases in the menu page. In the change tab, choose
Index or rate adjustment as a filter to review the relevant changes to the discount rate.
You can click on each individual contract to review the change to the discount rate.
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If the change in the payment cash flow or discount rate is after the date that the net present value
effect of the change is recorded. The date you chose in Set the date, is the date that the following
changes will take effect on the selected leases,
you can click Additional mass adjustments and then answer Yes to the question “Are you
registering an index adjustment at an earlier date than the effect takes place?". You can then set
the cash flow change date to the date when the change in the cash flow happens. For example, if
you set this date to April 2021, the net present value effect of change is recorded on January 2021,
while the change to the fixed payment cash flow happens in April 2021.
Click Apply and answer OK to the warning.
You will get information as follows:
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You can override and change the date for each individual contract by choosing the date under the
New cell.
When you are finished, click Next page and then click Save. After you have answered OK to the
warning, the date of the cash flow will be changed.
Open the calculation model and click Update leases in the menu page. Click on each individual
contract to review the change. You’ll see the change of cash flow happening in April 2021 and the
date the net present value effect of the change is in January 2021.
13.3 Roll back mass adjustments
If you make errors in one or several contracts using the mass adjustment functions, it’s possible
to roll back the mass adjustments in one operation. To do this, you need to be an administrator
and have access to Settings.
Go to Settings and choose IFRS 16.
Select Mass Adjustments Rollback
Choose the library to roll back. You need to do this library by library.
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14. Lease modification and reassessment
Lease modifications are common, like in situations where the business needs to downsize and
renegotiate lease contracts or where a lease is negotiated to end earlier, so that a new asset can
be leased, or in a situation where a lease agreement is extended beyond the original contract.
There’s guidance in IFRS 16, as well as, in auditor’s publication, like the one from KPMG that can
be located here:
https://home.kpmg/content/dam/kpmg/xx/pdf/2018/09/lease-modifications-2018.pdf
Please note that IFRS 16 distinguishes between lease modifications that represent, in substance,
the creation of a new lease that is separate from the original lease and the changes that
represents the change in scope, of consideration paid for an existing lease (Reassessment).
- A separate lease needs to be accounted for as a new lease from the effective date of the
modification
- An adjustment of the existing lease contract needs to remeasure the initial lease
While registering lease reassessment is pretty straight forward in Share Control, lease
modifications can be more complicated in terms of correct accounting. We encourage you to
follow the guidance below in a situation where you have agreed to new terms that are not a part
of the existing lease contract. Please note that a lease modification can involve both a termination
of an existing contract and a registration of a new contract.
Key concepts:
Reassessments (IFRS 16 39-43)
Reassessments are reassessment of estimates used in the accounting of a contract. Examples are:
- Assessment of the lease term (Such as, exercising an option to extend the contract).
- Assessment of whether a purchase option will be exercised.
- Expected amount payable under a residual value guarantee.
- Future lease payments from a change in the index or rates used to determine those
payments.
- Lease payments resulting from a change in floating interest rate.
- Variable lease payments becoming fixed or in-substance fixed payments.
The table below summarized the impact of changes (Source: KPMG publication Lease
modification):
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What is a lease modification? (IFRS 16 44-46 and 79-80)
A lease modification is a change in the scope of a lease, or the consideration for a lease that’s not
part of its original term and conditions.
- Increasing the scope of the lease by adding the right to use to one or more underlying
assets.
- Decreasing the scope of the lease by removing the right to use to one or more
underlying assets or by shortening the contract term (This is the most complicated
situation).
- Increasing the scope of the lease by extending the contractual lease term (that is not a
part of the original contract).
- Changing the consideration in the lease by increasing or decreasing the lease payments.
All changes that result in changes to the terms of the original contract are considered lease
modifications.
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The difference between a contract that shall be accounted for as a separate lease or not is
important for the registration in ShareControl. A contract that’s a separate lease must be
recorded as a separate contract in ShareControl, with a start date equal to the commencement
date of the lease. If the contract is not a separate lease, the change should be recorded as a part
of the original contract, using the change log. The effect will be recorded at the date of entering
the new contract and not the date of the commencement of the lease.
14.1 Change date
Before we register any changes, we need to know that the changes must be registered in
chronological order. Choosing a change date before the date of the last change is not possible.
It’s also impossible to choose a date after the end of the contract.
The changes are accounted in the month of the change, so it’s important that this date is within
the accounting period that’s not closed. We therefore strongly recommend following up changes
on a continuous basis.
The date of the change is registered here:
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Please note that the specific day of the month when a change occurs is considered by the 2020
version of the calculation model. If the change date is in the latter half of the month, the
calculation model assumes that the interest and depreciation have already been booked before
the change date. Therefore, in the calculation model, the depreciation and interest in the month
of the change will be the old depreciation and old interest of the month.
Let’s take CPI adjustments as an example. A quarterly paid contract has a CPI adjustment in
January 2021, and the quarterly lease payments will be changed from 491,040 to 502,000. If the
change date is set to January 31st 2021 (After January 15th 2021), the interest and depreciation in
January 2021 are the old interest (17,132) and old depreciation (152,722), before the CPI
adjustment. The value of the ROU asset pr January 31st 2021 will be 7,344,315.
If the change date is set to January 1st 2021 (before January 15th 2021), the interest and
depreciation in January 2021 are the new interest (17,557) and new depreciation (156,180), after
the CPI adjustment. The value of the ROU asset pr January 31st 2021 will be 7,340,474.
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14.2 Modify a contract
To change the payment of an existing contract, click Log other change (Submenu to Log change)
, enter the date for the change and enter a change comment. Then enter the new
number of lease payments in the Amount field, the new end date in the End field and add a
change comment. Although the calculation model will try to parse and describe the change, it’s
still useful to add one's own change comment to add further information.
Here, we see a reduction in the quarterly lease payments from 240,000 to 210,000 and an
increase in the lease period from December 31st 2024 to December 31st 2026.
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Go to the General section and answer Yes to the question, "Is the change a lease modification?"
Click Save and update the calculation file with the changes by clicking Update leases.
You can easily find the contract with the change of modification by using the filter in the Changes
tab. First, set the Lookup Periods, by choosing the period when the changes happen. Then go to
Search filters and choose Remeasurement Category.
Then choose Lease modification to get an overview of all the leases that have lease modifications.
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You can identify whether the change of a contract is a lease modification by entering the question,
"Is the change a lease modification?"
Click the contract with the lease modification to review the effect of the modification.
You can click on the number (963,006) in the Change column to see the calculation result before
and after the change in detail.
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The change amount (963,006) will appear under changes.
14.3 Exercise an extension option that previously has not been exercised
Click on Log other change (Submenu to Log change) and register the date when the change is
effective. Here, the change will be accounted in October 2020, since the change date is set to
October 16th 2020. The calculation result will not be changed before the change date. In this
example, all figures in the calculation model before October 2020 will be intact.
Uncheck the Unused box to exercise the extension option and then go the Discount Rate section
to change the discount rate from 3 to 4.
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Click Save and update the calculation file with the change by clicking Update leases.
Review the change in Lease liability and ROU asset (See below).
You can easily find the contract with a change of option extension by using the filter in the
Changes tab. Go to Search filters and choose Change type.
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Then choose Option extension to find all the leases that have exercised option extensions in the
Lookup periods.
You’ll also find the change in the reconciliation menu under the Adjustment column. You can
easily find the contracts with extension option changes by using search filters. Go to Search filters
and choose Has exercised option.
Then choose TRUE, to find all the leases that have exercised option extension.
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14.4 Terminate a lease contract ( In the lease period)
Please note that you can’t delete a lease contract after track changes are turned on. If a lease is
terminated before the end of the lease term, the termination must be used. It’s important to
distinguish between a reassessment of an existing lease contract and a lease modification.
Reassessment relates to a change in estimates, which means that the termination before the end
of the lease term was an option in the original contract. If it's not an option in the original contract,
it’s a lease modification.
14.4.1 Situation A: Reassessment
A termination that’s an option in the original contract.
In this case, answer No to the question, "Is the change a lease modification?"
Press Log other change for the lease (Here, we call it "Termination Reassessment")
in situation A and enter the date for the change. This is not the date the termination takes effect,
but it’s the date that will recognize the change to the liability and ROU asset value. We set it as
March 31st 2020.
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Please note that the Date of termination is the date that will be used in the calculation. The cash
flow will end in June 2020. A termination fee will be included at the date registered (Date of
termination penalty fee) in April 2020. Update the calculation file as described and make sure that
the lease is terminated as expected. Since the termination is not a modification, the reduction in
the cash flow reduces/ increases future depreciations and don’t result in a gain or loss on
termination, except in those cases where the termination has immediate effect (When the change
date and the date of termination is the same date).
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14.4.2 Situation B: Modification
You agree to terminate an existing agreement and enter a new agreement with the same landlord.
The termination of the existing contract was not part of its original terms. The new contract is
entered from the commencement date.
In this situation, the termination of the existing contract is a lease modification, and the answer
to the question, "Is the change a lease modification?" should be Yes.
Press Log other change for the lease (Here, we call it "Termination Modification") in
situation B and enter the date for the change (We set it to March 31st 2020). The Date of
termination is set to June 30th 2020. The termination penalty fee is 300,000.00, which is paid on
April 1st 2020. Answer Yes to the question, "Is the change a lease modification".
Save the change and then update the calculation file. Click on the Termination Modification
contract, so we can see that the cash flow stops after June 2020 (The date of termination). Since
it’s a termination modification, a gain and loss is recognized. For contracts with termination
modification, if from the change date, the future cash flow isn’t changed (For example when
there’s no termination penalty fee) and neither is the discount rate. The future depreciation won’t
be changed either.
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You’ll also find the change in the reconciliation menu, as well as, in the change menu.
You can use the Is Terminated filter in the Reconciliation tab and set it to TRUE to quickly find
the leases with termination changes. In the reconciliation menu, the gain or loss is also calculated.
You can use the Change Type filter in the Changes tab and choose Termination to quickly find the
contracts with termination changes. You can also identify whether the termination to a contract
is a lease modification by adding the question, "Is the change a lease modification?" in a cell in
the title bar.
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Please see the example guidance (Chapter 14.8, 14.9, 14.10) for examples of different lease
modifications.
14.4.3 Situation C: Immediate termination
If you terminate a contract immediately (Change date is the same as Date of termination), the
calculation model must set the ROU asset to 0, the Liability to 0, and the difference between ROU
asset and Liability will be a gain/ loss.
Press Log other change for the lease (Here, called "Immediate Termination ") in
situation C and enter the date for the change (Here, set as March 31st 2020). The Date of
termination is the same as the Change date (March 31st 2020).
Save the change and then update the calculation file. Click on the Immediate Termination
contract and notice how the cash flow stops after March 2020 (The date of termination). Since
the contract is terminated immediately, a gain and loss is recognized.
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You’ll also find the change in the Reconciliation menu and in the Change menu.
14.5 Purchase option
If a purchase option is registered, and you have decided to exercise a purchase option that was
not previously exercised and/or you need to change the purchase option price, please make the
change here. If the value of the residual value and the value of the purchase option price are
different, it will be a gain/ loss. The most common scenario is that the residual value has the same
value as the purchase option price, which means that the value of the purchase price will end up
in your accounts as a fixed asset. This amount will be the remaining book value of the contract.
In the calculation, the change will appear as follows with the net present value of change:
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14.6 Change in the discount rate
Change in the discount rate for an existing contract follows IFRS 16.40. This can result from a
change in the lease term or change in the assessment to purchase the underlying asset.
Click Discount rate as shown below. Here, the discount rate is changed on the date of the change
(We set it to October 21st 2020, as an example, and change the discount rate from 3 to 4).
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Click Save, update the calculation file and then click on the contract to review the calculation.
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For changes in discount rate for contracts that are based on a rate, we refer to the sections where
we discuss changes based on an index or rate (See sections 13.1 and 13.2).
14.7 Residual value guarantee
A residual value guarantee is initially registered under lease liability. A change (IFRS 16.42) in the
assessment of that guarantee is registered in Log other change under General. A residual value
guarantee is normally a situation where you, as the lessee, guarantees the marked value to the
lessor at the end of the lease term, when you’ll have to pay the difference between the marked
value and the residual value of the lease contract.
14.8 Reduction in scope - modification versus reassessment
A rental contract for 10 years with quarterly prepaid rent of € 25,000 paid in the beginning of each
quarter. There’s no right to terminate the lease according to the original contract terms. The
underlying asset is available on January 1st 2020. The discount rate is set at 5%. On January 1st
2025, the lessee and the lessor amend the contract to allow the lessee to reduce the rental period
and end the contract on December 31st 2016, by paying a one-time payment € 120,000 on 1
January 1st 2025. The discount rate is considered to be 9% from 01.01.2025 for the remaining
lease period. This amendment is not part of the original contract and should therefore be
accounted for as a lease modification.
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In this example, there are two elements to account for:
1. A reduction in the right of use asset and lease liability for partial termination of the lease
(The lease period is reduced by three of the remaining five years, i.e. a 60% reduction in
the lease period and nominal lease payments, which gives a corresponding reduction in
the asset and a slightly smaller percentage reduction in the present value of the debt,
because it’s the last periods that disappear).
2. A reduction in the remaining rental payments and termination consideration.
The original lease before modification is entered as a new lease in Share Control. The calculation
result is shown below:
The remaining liability on January 1st 2025 before the modification is 446,395, of which 191,716
relates to the new remaining lease period of eight quarters, calculated with the original 5%
discount rate. The new remaining liability for the modified lease payments (120,000 plus eight
quarterly payments of 25,000) calculated by the new discount rate (9%) is 305,700. The liability
for the remaining two years is therefore increased by 113,983 (305,700-191,716). The right of use
asset is reduced by 60%, i.e. 238,847 (398,078*0.6), and the right of use asset is then adjusted
Year Remaining
number of
quarters
Quarterly
payment
Termination
fee
Annual
discount
rate
Present
value
01.01.2020 40 25,000 5% 796,157
01.01.2025 8 25,000 120,000 9% 305,700
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correspondingly to the increase in liability (113,983). New calculations of liability, ROU asset and
profit or loss effect are illustrated in the following table:
Open the original lease and click Log change. This modification can be registered as follows in
Share Control Share Point add-in by using Log other changes.
01.01.2025
before
modification
Of the
remaining
two years
Reduction Increase New value
after
modification
Liability 446,395 191,716 -254,679 113,983 305,700
ROU asset 398,078 159,231 -238,847 113,983 273,215
Gain 15,831
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The calculation will look as illustrated below:
df
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The new value of ROU asset on 01.01.2025 is now 273,215 (=11,384+261,831). The gain on
modification is 15,831. Click the number “-140,695” in the Change column. This enables you to
find the new value of liability (305,700) on the effective date of the modification January 1st 2025.
If the original lease had contained a termination option at the end of year 2024 towards paying a
one-time payment of 120,000 on January 1st 2025, this would not be a modification but a
reassessment. There would have been only one element to account for, i.e. reduction in the right
of use asset and lease liability for change in the assessment of the termination clause. The new
value of the lease liability on January 1st 2025 would be same to the modification above (305,700).
However, there would be no gains or losses to be recognized in the income statement, and the
right of use asset would be adjusted according to the change of the lease liability.
Open the original lease and click Log change. This way, the reassessment can be registered as
follows in Share Control Share Point add-in by using Log other changes.
01.01.2025
before
reassessment
Change New value
after
reassessment
Liability 446,395 -140,695 305,700
ROU asset 398,078 -140,695 257,383
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The calculation will look as shown below:
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The new value of ROU asset on January 1st 2025 is now 257,383 (=10,724+246,659). Click on the
number “-140,695” in the Change column to locate the new value of liability (305,700) on the
effective date of the modification (January 1st 2025).
14.9 Reassessment of option and increase in scope
A rental contract for 5 years with quarterly prepaid rent of € 25,000 paid in the beginning of each
quarter. The underlying asset is available on January 1st 2020. The lease has an option for an
extension of five years. When initially entering into the contract, it was considered not reasonably
certain to exercise the option. The discount rate was set at 5%. In June 2024, the company decides
to exercise the option and agrees on an increase in the lease area, so that the quarterly rent is
increased from 25,000 pr. quarter to 32,000 per quarter, effective from July 1st 2024. The discount
rate is now increased to 6% for the remaining rent.
In this case, there’s a reassessment of the exercise of the option, as well as, a modification
(Increased lease area).
The change in the present value of 557,036 is recognized as a credit lease obligation and debited
right of use on effective date July 1st 2023. Since the increase in rental space happens at the same
time, it’s not necessary to decide whether the change is at a standalone price. The quarterly
depreciation is changed from 22,320 to 27,349.
Remaining
number of
quarters
Quarterly
payment
Annual
discount
rate
Lease
liability
ROU asset
01.01.2020 20 25,000 5% 446,395 446,395
01.07.2024 before change 2 25,000 5% 49,697 44,639
New value 01.07.2024 22 32,000 6% 606,733 601,676
Change 01.07.2024 557,036 577,036
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When the original lease before the change is entered as a new lease in Share Control, we can get
the calculation result as shown below:
Open this original lease in SharePoint and click Log change. This change can then be registered as
follows in Share Control Share Point add-in by using Log other changes.
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The calculation will look as illustrated below:
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The new value of the ROU asset on 01.07.2024 is now 601,676 (=9,116+592,560). The quarterly
depreciation is changed from 22,320 (=7,440*3) to 27,349 (=9,116.3*3). Click on the number
“557,036” in the Change column to locate the new value of liability (606,733) on the effective
date of the modification (July 1st 2024).
If the increased lease area is only available from January 1st 2025, then the change in lease liability
and the associated ROU asset must be recognized at the time that the increased lease area
becomes available, and depreciation of this also starts at this time. The change, however, related
to the existing premises, is recognized on July 1st 2023.
14.10 Termination and relocation to new premises owned by the same landlord
As in 13.8, at the end of 2022, the business has grown and needs new premises. A new lease starts
on January 1st 2023 for five years with the same landlord for other premises (New rental property).
The rent is at a standalone price of 50,000 pr. quarter. The previous contract is terminated from
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January 1st 2023 without special compensation, and the company then moves to the new
premises. The discount rate is now estimated at 5.5%, resulting in the following data:
Open this original lease in SharePoint and click Log change. Termination of the original lease can
then be registered as follows in Share Control Share Point add-in by using Log other changes.
The calculation will look as illustrated below:
Remaining
number of
quarters
Quarterly
payment
Annual
discount
rate
Lease
liability
Rou asset Gain
01.01.2020 20 25,000 5 % 446,395 446,395
01.01.2023 before change 8 25,000 5 % 191,716 178,558 13,158
New contract 01.01.2023 20 50,000 5.5% 883,219 883,219
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The gain on this modification is "13,158" in the Gain or loss column.
When we create a new folder to register the new lease in Share Control, the calculation result of
the new lease is as illustrated below:
In this case, the original lease liability and the right of use asset are terminated, a gain is
recognized on January 1st 2023, and the new lease is recognized on the same date. In another
scenario, where the new lease is agreed on at an earlier date, the measurement and recognition
of gain would also have occurred at that earlier date. The remaining lease obligation and right of
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use, however, would continue to be recognized until January 1st 2023. The new premises would
only be recognized from January 1st 2023.
14.11 Impairment of the ROU asset
An impairment of the ROU assets is registered in Log other lease changes.
We recommend that before you record an impairment of the ROU asset, you check the remaining
value of the ROU asset in the calculation file and calculate the impairment in the month of
recording.
Please note that if the date of change is in the first half of the month, the impairment will be
recorded before the depreciation is recorded, and the depreciation is changed in the same month.
If the date of the change is in the second half of the month, the impairment will be recorded after
the depreciation is calculated and the depreciations is changed from the next month (see below).
Depreciation is adjusted over the remaining useful life of the ROU asset.
Illustration:
Impairment of 200.000 recorded at the end of the month.
(Please note that a Change comment is not necessary. The change will automatically be set to be
"Impairment" in the calculation file.)
In the calculation file, depreciations are adjusted from the next month (January 2021).
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Impairment recorded at the beginning of the month.
In the calculation file, depreciation is changed in the same month (December 2020) as the
impairment is recorded.
14.12 Covid-19-Related Rent Concessions
IASB has issued amendments to IFRS 16 to allow lessees (No relief for lessors):
— to not account for rent concessions as lease modifications.
— if they are a direct consequence of COVID-19 and the revised
consideration is substantially the same or less than the original
consideration.
The reduction in lease payments relates to payments due on or before June 30th 2021,
and no other substantive changes have been made to the terms of the lease.
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There is guidance about Covid-19 related rent concessions in auditor’s publication, like the one
from KPMG that can be found here:
https://home.kpmg/content/dam/kpmg/xx/pdf/2020/06/leases-rent-concessions.pdf
We recommend watching our webinar for more guidance about Covid-19 related rent
concessions:
https://www.youtube.com/watch?v=UzPZarHvgXM&list=PLQPoEZ92VaErPhiSoS7X__DrtuBw-
PjbU
Lessees applying the practical expedient are required to give additional disclosers to disclose the
amount recognized in profit or loss to reflect changes in lease payments that arise from covid-19
related rent concessions.
— If not modification accounting – typically accounted for as variable lease
payment
— Rent relief: Derecognition of liability (IFRS 9 no. 3.3.1) and gain in P&L –
to the extent the relief is unconditional
— Rent deferral: No derecognition, but potentially net present value effect
on liability
— No effect on ROU asset
Impairment indicators may be present and impairment test may have to be performed.
1. Update the ShareControl add-in and calculation:
The Share Control calculation file needs to be updated in order to make calculations in accordance
with the amendment to IFRS 16. We also recommend updating the ShareControl add-in to the
latest version to get the improved registration of periods. This will make the registration process
easier. Contact us to make the upgrade.
2. Covid-19 amendments to IFRS 16:
The following examples are for those that use the practical expedient as described below and
fulfil the requirements for the practical expedient. If you’re not within the scope of the
amendments, please see the guidance of accounting for reassessment and modifications in the
first section of this manual.
14.12.1 Release of payments
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The lease contract is prepaid quarterly, with a rent of 10.000 and a discount rate of 4%. The rental
period is from January 1st 2018 to December 31st 2025, with an option to extend another three
years (Unused).
In this example, no rent is payable in Q3 2020, this concession follows the covid-19 amendments,
and you’ve decided to use the relief.
The cash flow is registered as follows, before the rent concession:
Use Log other change .
We recommend copying the number of new periods that is required first. In this case, two new
periods: Third quarter 2020 with 0 payment and the period from October 1st 2020 to the end of
the contract with a payment of NOK 10.000.
Set the date for when the change should be recorded. The data needs to be BEFORE the first
change in payments. If the date is set after the change is effective, the change will not be included.
Write either Covid-19, covid19 or covid-19 and separate with a semicolon if you want to add other
comments.
Enter new periods by clicking and make modifications to dates and amounts. We
recommend doing this chronologically, since the start date is always set to the date after the end
date.
Then click Save and remember that the discount rate should not be updated.
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Go to the calculation file and click Update leases on the Menu page.
Go to the lease in question and review that the new payments structure is correct and that the
period the change is registered is correct (In this case, June 2020).
The gain and loss are the net present value of the rent relief at the chosen date for the accounting.
Depreciations are not changed, and the lease liability reflects the relief of rent for one quarter.
This is to ensure that the lease liability is correct at the end of second quarter 2020.
14.12.2 No rent is payable in Q3 2020, rent in Q3 2021 is increased by 11’.
We use the same contract as above and follow the same steps. The change is within the scope of
the Covid-19 amendments in IFRS 16. In this case, we need 4 new periods. The registration of the
change and the calculation result can be seen below.
Use Log other changes and enter Covid-19 under Change comment.
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Update the calculation file and review periods.
Make sure the change is registered in the correct period.
If the NPV of the change is small, you might consider not registering these in Share Control, but
please bear in mind that the lease liability can be misleading in the periods the payment is
delayed.
14.12.3 No rent is payable in Q3 2020 and one quarter is added to the end of the
lease at a rent of 10’ for that quarter.
The change is evaluated to be within the Covid-19 amendment of IFRS 16.
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Use Log other changes and enter “Covid-19” under comments.
Update the calculation file and review periods.
Make sure the change is registered in the correct period.
14.13 Log multiple changes in the same date or the same month
If you have multiple changes that occur at the same date, you can register these changes
simultaneously. For example, when exercising an option to extend, one must usually also update
the discount rate. These two changes can be registered simultaneously. Another example is, if
you have a contract in a different currency than the functional currency, you would always register
the updated exchange along with other changes.
Please note that the calculation model combines all changes registered in the same month.
Therefore, registering an option to extend January 1st and then consequently registering an
update to the discount rate on January 1st is the same as registering these simultaneously. This is
also true for changes at the beginning and at the end of the month. If a CPI adjustment is
registered January 1st and an option to extend is registered January 31st, the calculation model
will treat this as if the CPI adjustment was also registered January 31st. The full change log is still
available, so you can always go back and see what happened, but it will not be reflected in the
calculation.
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Finally, since changes are merged within the same month, one must take extra care when using
the right-of-use asset adjustment fields (Impairment, Derecognition due to sublease and Other
changes). If these are used while registering multiple changes in a period, you must manually
aggregate them in the last change of the month. Even though registering two changes on the
same date can also be used to correct a change that isn't correct, it’ll be in direct conflict with
having the calculation automatically aggregate the ROU changes
14.14 How to test the accounting of changes
Complex changes might need to be tested before they are finally accounted. It’s easy to run a test
before you make your conclusion.
1) Make a copy of the contract – use the cogwheel to make a copy of the contract and
rename it for testing purposes.
2) You can move the contract to a separate library for testing purposes (This isn’t necessary).
3) Do the changes you plan to do, review the result and conclude.
4) When you’re finished, either move the contract back to the original library and delete the
contract you copied from or reconstruct the changes on the original contract.
15. Errors
There are several options to correct an error, please note that the accounting date function is
available for those with the pro version and/or a service contract.
15.1 Roll back to previous version
On the top of the folder, you can roll back to a previous version by using the Rollback to the
following version function, which you can get to by clicking .
How many versions a contract has is determined by how many times you have saved the contract.
Every time you create a new contract or log a new change to a contract, by saving the contract,
you get an extra version of this contract and an extra corresponding choice in the Rollback to the
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following version dropdown menu. All the changes are saved as different versions in
chronological order.
If you’ve made an error in a certain version, since changes need to be done subsequentially, you
must roll back to the previous version to the version you want to correct the error in. When that’s
done, you need to re-log all other subsequent changes.
Let’s use the contract, Akersgate Oslo, as an example. As illustrated below, this contract has three
versions. Two different changes are made through Log change. The first change was registered
on July 2st 2020 in order to exercise an extension option. The second change was made on March
1st 2020 to change the discount rate from 3 to 2.
The calculation looks as illustrated below:
The CB 2019 Lease liability is 4,543,844 and the CB 2019 ROU asset is 4,529,227.
Every time you log a change in a contract, we recommend that you describe the change using the
Change comment field. It’ll make it easier to know what specific change has been made to a
certain version.
If the contract, Akersgate Oslo, is extended to June 30th 2024 and this decision was made on
November 1st 2019, it means a mistake was made in the second version, where the contract was
extended to December 31st 2023 on a wrong change date (December 1st 2019). In this case, you
must roll back to the first version and then log a new change (Changing the end date of lease
payments in the option period to June 30th 2024) to a different change date (November 1st 2019).
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Since a change of the discount rate is registered with the change date on March 1st 2020, after
making the change to the second version (Exercise extension option), we need to register the last
change again: Change the discount rate from 3 to 2 on March 1st 2020. You can achieve this by
following the steps below:
1. Double click on the first version and then click OK in the popup window.
2. You can just delete the last letter of the title and then add it back. By doing this, you’ll be able
to save the contract and create a new one and still keep the first version by clicking Save.
There’s only one version in the dropdown menu now.
3. Click Log other change to change the end date of lease payments in the option period from
December 31st 2023 to June 30th 2024 on the change date, November 1st 2019.
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After you save this change, there are two versions.
4. The last step is to re-register the change of discount rate on March 1st 2020 via Log other
change. After you save the change, the third version of the contract will appear in the dropdown
menu.
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Note: Because we corrected the change (Exercise extension option) that was registered in 2019,
this will have an accounting effect to the closing balance in 2019. The value of the CB 2019 Lease
liability is increased to 5,074,974 after the correction, and the value of the CB 2019 ROU asset is
increased to 5,053,434. Therefore, at the end of your accounting year, we recommend double
checking that all the changes are correctly registered before closing the year end.
15.2 Accounting date
In the 2021 version, we introduce the Accounting date function, which makes it possible to
correct errors from previous periods in a selected period with the accumulated effect of the error
calculated and recorded at the selected date. This functionality is available for customers with a
service contract or the pro subscription.
Please note that IAS 8 requires restatement of previous financial statements if the error is
material. The Accounting date function, as described below, can’t be used in these situations.
Immaterial errors are not required to be corrected, but if you want IFRS 16 liability, ROU asset,
instalment, interest, and depreciation to be correct going forward, the Accounting date function
is useful. The Accounting date function works on operating leases, financial leases and subleases.
The Accounting date function is available for customers with the pro version or with a service
contract with us.
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The Accounting date function is only available after it’s turned on by the admin user. This is to
avoid confusion in the date-to-date registration of contracts. We recommend turning the
function off after you’ve made the correction.
For those who use accumulated figures in the accounting integration model, the result should be
the same if you correct an error back in time. The function can be useful in situations where an
error relates to a previous fiscal year.
The Hide and Unhide settings can be found under Settings: IFRS 16: Show additional options.
For a contract that you have forgotten to register, you can set the accounting date to recognize
the accumulated effect when the Accounting date function is turned on.
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After the contract is published, the accounting date will be locked and can only be accessed
through the Log change function.
Please note that the Change date is the date that the change should have been recorded, and the
accounting date is when the actual change is recorded and the accumulated effect is recognized.
The accounting date can only be set after the change date.
You might need to open the Reporting period to register a new contract or change to an existing
contract before the accounting date. The Reporting period is found under Settings: IFRS 16.
Below are examples of the use of the Accounting date function:
15.2.1 A lease contract has not been registered when it was entered
In June 2021 Company A becomes aware of that a lease contract, effective from October 1st 2020,
due to a mistake was not included in the calculation as of the year-end 2020. The error is not
material, but since Company A wants the figures to be correct going forward, they use the
Accounting date function.
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Before you start, turn on the Accounting date function under Settings (See above).
1) Enter the new contract with the correct data, including the correct start of the lease
payments
2) Set the accounting date as the date of the financial close (In this example, June 30th
2021). This is found under the IFRS 16 scope section.
3) Click Save as draft, update the calculation and review the result.
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The accumulated effect of payments, interest, instalments and depreciations are recorded in June
2021, and the Lease liability and the ROU assets are recorded at the same date, taken into effect
that the contract started on October 1st 2020. The contract is now correctly recorded.
15.2.2 Forgot to register index regulation
In this case, Company A normally registers the index regulation in December the previous year,
when the regulation is known, even if it’s not effective until January 1st. Since one contract was
overlooked and not regulated in December 2020 and this is discovered after the year end 2020
and quarter 1 2021 are closed, Company A decides to make the correction on June 30th 2021 for
the q2 close. The error is not material.
Use the change log (Adjust index or rate) for the contract.
Enter the correct change date (In this example December 31st 2020), the accounting date (June
30th 2021) and then the new lease payment (In this case from 200.000 to 205.000).
Click Save and update the calculation file.
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The adjustment of the ROU asset and the lease liability is recorded in June 2021. The correction
in payment, which has accumulated to 10.000 (Two increased payments of 5.000) is registered at
the same date, and the accumulated effect of interest, instalments and depreciation is registered
in June 2021. Going forward, the contract will be accounted for, as the correction was done at the
correct time, in December 2021.
15.2.3 A contract was entered with incorrect lease payments
Company A discovers that the lease payments for a contract includes non-lease payments that
exaggerate the IFRS 16 lease payments and ROU asset. They want to correct this contract by
reducing the monthly lease payment from 10.000 to 8.000 from the commencement of the
contract (September 1st 2020), recording the effect at the financial close, June 30th 2021.
Go to Log other change of the actual contract.
Set the change date to September 1st 2020 (The commencement date of the contract) and the
accounting date at the date when you want the correction to be made (In this example, June 30th
2021).
Change the lease payments from 10.000 to 8.000 under Amount.
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Click Save and update the calculation file.
The change represents the NPV effect of the change in lease payments from the commencement
of the contract to the date of the change. In this example, we are referring to a reduction in the
monthly payment from 10.000 to 8.000. The sum of overstated payment (The net of 9 overstated
payments of 2.000 minus the actual payment in June of 8.000) and the accumulated effect of 9
months of overstated interest and depreciation plus the actual interest and depreciations for June
2021 can be viewed under the Lease Payments column.
Please note that if the contract has been index adjusted, you need to roll back to the version
before the index adjustment and register it again.
15.2.4 Discount rate is not correct
Company B discovers that the discount rate was set to 4% instead of 3.5% for a lease contract at
the implementation of IFRS 16 on 1 January 1st 2019. Since the contract is material for the
company, they’ve decided to make this correction. The correction was made on June 30th 2021.
Go to Log other changes and set the change date to January 1st 2019 and the accounting date to
June 30th 2021.
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Make the change of to the discount rate from 4% to 3.5%.
Click Save and update the calculation file.
In June 2021, the interest is reduced (With an adjustment to instalments) due to a previously
overstated interest rate. Depreciations, on the other hand, have increased due to an increase of
the NPV of the contract on January 1st 2021. This is because of the reduced discount rate that
increases the NPV of the contract.
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15.2.5 Exercise of an extension option was not registered in the correct period
Company A has an option to extend a lease contract with an additional 3 years from July 1st 2021.
When the accounting department asks the housing department, they’re informed that they
already signed an agreement to extend the contract in December 2020. The accounting
department decides that for the interest and depreciations to be correct, going forward, to use
the Accounting date function to calculate the accumulated effect in June 2021, by exercising the
option in December 2020 instead of now. The alternative is just to extend the option in June 2021.
Go to Log other changes and set the change date to December 31st 2020 and the accounting date
to June 30th 2021. Uncheck the box under Unused to change the status of the option you want to
exercise.
Review and update the discount rate (Here, reduced from 4% to 3.5%).
Click Save and update the calculation file.
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The accumulated effect is calculated in June 2021. If you’re uncertain about the accuracy of the
figure, you can review how the calculation would look like if the exercise of the option was
registered in the correct period, by turning off the Accounting date function under Settings on
the Menu page.
As you can see illustrated above, the figures are consistent.
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15.2.6 Forgot to change the discount rate when exercising an extension option
On December 31st 2020, Company A registered a change to exercise an option to extend a lease
contract with an additional 3 years from July 1st 2021. In June 2021, however, they discovered
that they had forgotten to change the discount rate when exercising the extension option. The
accounting department decides to use the Accounting date function to change the discount rate
and calculate the accumulated effect in June 2021.
Go to Log other changes and set the change date to December 31st 2020 and the accounting date
to June 30th 2021.
Change the discount rate from 4% to 3.5%.
Click Save and update the calculation file. The accumulated effect is calculated in June 2021.
15.2.7 Change the start date of a contract to an earlier or a later date
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Company A discovers that a lease with a start date set to January 1st 2021 actually started on
October 1st 2020. They decide to correct this error, using the Accounting date function.
The original registration:
Go to Log other changes and set the change date to the start date, January 1st 2021, and the
accounting date to June 30th 2021. Then change the start date to October 1st 2020. The accounting
date is the date on which you want the change to be recorded.
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Click Save and update the calculation file.
If the contract starts on a later date, such as April 1st 2021, you can go to Log other changes and
set the change date to the start date, January 1st 2021, and the accounting date to June 30th 2021.
You then change the start date to April 1st 2021.
Click Save and update the calculation file.
15.2.8 Change in the asset removal obligation
Company B discovers that the asset removal obligation (Registered in Share Control) for an asset
has changed from an estimated EUR 100.000 to EUR 200.000. The change is not registered and
company B want the change to be registered in June 2021.
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The original registration:
The ARO increases the ROU asset with EUR 100.000.
Go to Log other changes and set the change date to the start date, January 1st 2019 and the
accounting date to June 30th 2021. Then go to General to change the ARO obligation from EUR
100.000 to EUR 200.000.
15.2.9 Change post-paid to prepaid
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Company B is informed by the auditor that a prepaid contract is registered as post-paid. They
consider the error not material, but points out that the lease liability might be overstated at the
financial close. Company B decides to make the correction that has been there since the
implementation of the contract from January 1st 2019 in June 2021.
The original registration:
Go to Log other change.
Set the change date to January 1st 2019 and the accounting date to June 30th 2021.
Go to General and make the change from post-paid to prepaid (Yes instead of No).
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Click Save and update the calculation file.
The NPV effect is small, but the payment pattern is changed. We recommend that you review the
change by clicking on Change and review the cash flow before and after. The effect on the lease
liability can be more significant at a specific date.
15.2.10 Forgot to register the termination of a contract
Company B has a contract that is terminated in September 2020 but not registered as terminated
as of the year-end 2020. The error is first detected in February 2021. The company uses the
Accounting date function to register the accumulated effect of registering the termination in an
incorrect period.
The lease contract was originally registered as illustrated below:
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Go to Log other change and set the change date to September 1st 2020, the accounting date to
February 1st 2021 and follow the instructions for termination. In this case, we don’t have a
termination penalty fee.
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Click Save and update the calculation file.
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The termination is now registered in February 2021, and the two payments made in October 2020
and January 2021 are corrected (-200.000). The gain and the loss are calculated as the difference
between the remaining value of the ROU asset and the lease liability (-1.998).
15.2.11 The termination of a contract is incorrect
In this situation, company C has erroneously registered a contract as terminated in September
2020. This was detected in June 2021, and the company uses the Accounting date function to
make the correction.
The contract was registered as illustrated below:
To reverse the termination and calculate the effect in June 2021, make these changes:
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The Change date is the same date as the date the termination was originally registered, and the
Accounting date is the date that the effect of the error should be calculated. Turn off the
termination by answering No instead of Yes to the question, "Is the lease contract terminated?".
Click Save and update the calculation file.
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The termination is reversed in June 2021, the accumulated effect of the non-registered payments
in October 2020, January 2021 and April 2021 (300.000) are registered in that period, and the
change of the gain or the loss is reversed.
15.2.12 Remove a lease that has incorrectly been registered as an IFRS lease
Company D has registered a contract to rent an accounting system as an IFRS 16 lease contract.
After a discussion with the auditor, it's concluded that the contract is outside the scope of IFRS 16
(Section 3 (e))
The contract has a payment of € 5 000 per month, and the calculation is as follows, from January
1st 2019.
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In June 2021, it's decided to remove the contract and account for the accumulated effect, using
Accounting date.
Use Log other change and set the change date to January 1st 2019 (The start date of the lease)
and the accounting date to June 1st 2021. Set the payment to 0 instead of € 5 000.
Click Save and update the calculation file.
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The correction is calculated in June 2021, zeroing out the ROU asset and the lease liability, and
calculating the accumulated effect of terminating the contract.
Please note that after we introduced Accounting date, the previous guidance on how to correct
changes is not relevant.
16. Deleting a lease contract
After a lease contract is published, it’s important to note that it should not be deleted before the
lease term ends or before it’s terminated as a part of the original contract (Reassessment) or as a
lease modification. In case you need to remove a lease from the library, due to an error or due to
a sale of a subsidiary or part of the business, we recommend using the termination function to
get the footnote information right. If you just delete the contract, it will be removed from the
start of the contract and won’t be included in the opening balance. Instead, it will be disclosed as
a disposal. In order to minimize the risk of accidental deletion of leases, we’ve made it difficult to
delete leases. If you need to delete a lease, it can be done as described below:
1) If the lease is not marked as an IFRS 16 lease (and is not part of the calculation), then any
user can delete it like any other regular folder, unless it’s locked. When you open a lease
and click the edit button, you should see a red delete button appear.
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2) An IFRS 16 lease can be deleted if it’s a draft. However, for a published lease where the
log change is turned, it needs to be rolled back to the first version to be deleted.
3) A user with admin permissions can still delete a lease by following the regular deletion
procedure. There are two levels of admin users: Global, that can see every division, or
Division Level Admins. This means global users can delete any lease in all division and the
division level user can delete any lease in their specific division from the system.
17. Implementing IFRS 16 – the implementation options
Please note that the description below requires use of the implementation calculation. This is only
relevant for companies that can use the IFRS 16 Appendix C Effective date and transition.
17.1 The full retrospective implementation
The full retrospective implementation requires all contracts to be uploaded with the correct
minimum lease payments and discount rate in each period.
The cumulative catch-up approach has two options:
17.2 ROU asset = lease liability
This option the is most common scenario and is automatically used in the calculation model,
unless specified otherwise.
When it comes to setting the start date of the lease, since the historical payments are irrelevant
for the right-of-use asset, one can choose a start date close to the implementation date. Keep in
mind that if January 1st 2019 is chosen as the lease start date, the calculation model will treat this
as a new lease in 2019. This is why the start date for old leases should be chosen to be the last
payment date before 2019. For example, for a monthly paid lease this would be December 1st
2018, whereas, for a quarterly paid lease this would be October 1st 2018. See the calculation
documentation for a more in-depth explanation of how different start dates affects the
calculation.
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17.3 Measure ROU asset retrospectively
This approach is used if you choose the option in the IFRS 16 C8 section b (i) and the historic lease
payments data needs to be adjusted.
This simplified retrospective implementation is rarely used. If you want more information about
it, please contact us.
17.4 Transition relief for leases ending within 12 months and low value assets l ease
Use the section, IFRS 16 scope, to identify these leases:
If your lease falls under one of these categories and you decide to use the relief, information
about lease payments and periods must be completed:
We recommend that after completion of the relevant information for short term or low asset
value leases, consider moving these contracts to a separate library, called Short term or low value
leases, if you want them to be separated from other contracts. Use the Move function under the
cogwheel. If they’re included with other contracts, they won’t be included in the calculation of
the lease liability or ROU asset.
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In Excel, short-term lease and low asset value lease are both included in the overview. The details
about lease payments, however, are not available for individual contracts, since the lease
payments are not part of the lease liability and ROU asset.
To sort these contracts, use the filter as illustrated below:
To show Low asset value leases:
To show Short-term leases:
These are also included in the note disclosures (Expenses relating to short-term leases and
Expenses relating to a lease of low-value assets, excluding short-term leases of low-value assets).
Please note that you don’t need to include these leases in footnote disclosures. If you have a
significant number of short term- and/ or low asset value leases, information about expenses are
easier to monitor by separating the expense in the financial statement.
18. Calculation
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18.1 Access to the calculation spreadsheet
We provide the calculation model as part of the set up procedure and link it to the relevant library.
When a new version in launched (This usually happens once per year), we’ll contact you for an
update, assist in setting up the new version with the correct links and make sure the calculation
is consistent.
We recommend storing a version of the calculation by utilizing the copy function. The final
calculation should be locked.
18.2 Establish link between SharePoint and Excel
The next step is to establish a link from the data in SharePoint to Excel.
Start by opening the calculation in Excel by clicking on the calculation file. Once Excel opens, make sure you enable Macros in the document:
Then go back to your browser and go to the library to download data from SharePoint in an Excel
format.
Move to a library and click . Once clicked, you will get a similar popup. How it appears depends
on your browser:
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Click OK to proceed. You’ll either have a file automatically downloaded and saved in your downloads folder, or you’ll see a question like this:
Open the file from your downloads or click Open to open it directly without saving.
Once loaded, Excel should appear in a new window and ask this question:
This informs you that the file uses data connections, which means that the data in the table reads from SharePoint and that this must be cleared by the user. Click Enable, select New worksheet from the follow up dialog and click OK:
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You should see a new sheet named Query appear in the calculation file that contains your lease data (Feel free to rename the new sheet for convenience). If, by any chance, this sheet was added to the wrong Excel file, you can easily move it to the correct file by right-clicking the sheet and selecting Move or Copy… from the menu. Select the correct destination book in the dialog, and confirm the move by clicking OK:
Once this is done, you should now have a calculation file with the sheet containing your leases. Beware that you don’t need to repeat this process every month. You only need to do it once to create the first calculation file. For next reporting period, you can then copy the previous calculation folder by clicking the cogwheel on the folder and selecting the Copy with files option:
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Then, you can simply update the title and period to the new one you work with. The copied calculation will have this connection in the file. And when you click the Update button on the Menu sheet, fresh lease data will be downloaded directly into the calculation.
If you wish to extract data from several libraries into the same calculation, you must enter each library and repeat the process above. Copy and paste into the same calculation Excel spreadsheet.
18.2.1 Warning about disconnected workbooks (Warning ID 605)
For some reason, we’ve had issues with customers using disconnected workbooks. I.e. the tables
are no longer connected to a source (SharePoint's library). It might be a good idea to warn the
user about this. In the 2020 version of the calculation file, there will be warnings that tell users if
there exist tables/ workbooks that are disconnected from SharePoint and that lists all the
disconnected tables.
If a customer has tables that are disconnected from SharePoint when they update leases, they’ll
see a pop-out window, warning them that there are data sources disconnected from SharePoint.
After clicking OK in the warning tab, they’ll be able see which worksheets are disconnected from
SharePoint as shown below.
The customer will then need to delete the disconnected worksheets that are listed in the warning
and relink the libraries in the SharePoint to the calculation model.
18.3 The main calculation spreadsheet (Menu)
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18.3.1 The Menu spreadsheet
18.3.2 Update data from SharePoint
After the link has been established (See above), metadata from the registration in SharePoint will
appear here. The data in the calculation spreadsheet will be updated by clicking the Update leases
button on the Menu.
The metadata will contain changes that are relevant, as well as, changes that are deleted.
Update all data and the recalculation by clicking
Clear all leases by clicking
This can also be a function that your auditor uses to control that the calculation is correct and
that you have not made manual adjustments.
If you have an integration function, you can get an integration export sheet by clicking Export
leases.
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18.3.3 Settings
By clicking the Settings button, you’ll find a settings menu with different options.
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Warning and error settings
Hide warnings: When you check this box, Warning tab won’t be shown in the calculation
spreadsheet. This is useful if you have checked all warnings and have concluded that the leases
are registered correctly.
Hide errors for non-IFRS 16 liable leases: When you check this box, the errors for the short-term
and the low-value leases registered in the system will not be displayed in the calculation model.
Currency settings
Use closing currency rates only: By checking this box, only the closing currency rate will be used.
The closing currency rate is determined by the currency date, which is the same date as the Period
end date set in the Lookup periods. By unchecking the box, the system will automatically calculate
income statement captions and changes to average exchange rates. Lookup periods set the date
range to retrieve the average exchange rate.
Currency exchange rate source: Here, you can specify your currency source. Two sources are
currently available in the dropdown menu: Norges bank and Sveriges Riksbank. If you’re
interested in adding your own currency source, please contact us to see if it’s possible to include
it.
Calculation settings
Pro Forma calculation: Turn on this feature to get proforma figures in a period before the
acquisition date of leases acquired through a business combination. By checking the box, all the
acquisition date effects will be removed. This means that the calculation model will adjust the
ROU asset so it corresponds with the remaining liability on the IFRS 16 implementation date,
January 1st 2019, instead of the acquisition date. A warning will show up if you set the calculation
model in Pro Forma mode.
Pre implementation calculation: By checking this box, the implementation date effect will be
removed. This means that the calculation model won’t make any adjustments and that the ROU
asset will correspond to the remaining liability on the IFRS 16 implementation date, January 1st
2019. A warning will show up if you set the calculation model as a Pre Implementation mode.
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Short-term liability formula: We support two separate definitions for the short-term liability. By
selecting Standard formula, the short-term liability will be the sum of the instalments for the next
12 months. By selecting Alternate formula, the short-term liability will be the sum of the
discounted value of the lease payments for the following 12 months. When selecting a formula,
its definition will be displayed.
Extra functions
These are used to export the calculation at a given time to a separate system like Power BI.
Contact us for details
18.3.4 Lookup periods
For the period selections (Period Start and Period End), you can locate Lookup periods by using
the drop-down menu or by entering the dates individually. It’s not necessary to set a start date
or an end date. If the start date is not specified, it’s automatically set to January 1st of the same
year as the end date. When the end date is blank, it will automatically be set to the last date in
the same month as the start date.
For information for one month, set as either
or
For the first quarter in 2019, either
or
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For the second quarter 2019
For the full year, 2019, either
or
For Year to date period (for example, January 2019 to October 2019), either
or
Period Start and Period End will affect which numbers appear in the result column. Period
Instalments show the numbers between Start and End. If both are empty, the search result will
be empty. If only the Period Start is empty, you get the sum for the entire period from January to
the Period End month in the year that is set in the Period End (I.e. year to date amount). If only
the Period End is empty, you get the result for the month that’s set in the Period Start (I.e. a one-
month period).
18.3.5 Currency
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The Target currency cell is the currency of results that the numbers should be displayed in for the
different summary sheets. If a lease is in a different currency, the calculation result will be
converted to the target currency, using the rates in the currency table. The conversion mechanism
(Average exchange rates or closing exchange rates) can be chosen in the Settings menu. The
period selector, Lookup periods, determines which exchange rates are retrieved. The opening
exchange rate is the last exchange rate available before Period Start. The closing rate is the last
exchange rate available before or on the Period End. And the average rates are the monthly
averages for each month in between.
If no Internet connection is available, or if the Lookup periods are longer than 1 year, with Sveriges
Riksbank as the source of the currency exchange rate, you’ll get the following error message:
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The currency table is based on the currency exchange rate source specified in the Settings menu
(Currently either Norges bank or Sveriges Riksbank). If the target currency doesn’t exist in the
currency table, you need to either change the target currency or update the currency table to
include the currency. A textbox will appear to inform the user about this.
You can also use your own exchange rates. To do this, click the Edit currency table button. This
will show you the exchange rate table, which you can edit freely. Editing the table will lock it,
meaning that it‘ll no longer automatically update rates from Norges Bank or Sveriges Riksbank. In
this case, a textbox informing the user about this will become visible, and a button to re-sync the
exchange table to its source will appear. The textbox and the button are shown below. If this
button is clicked, the table will automatically retrieve rates based on dates in the selected Lookup
periods.
18.3.6 Go directly from the calculation file to the contract in SharePoint
From a calculation spreadsheet of an individual contract in the calculation file, you can go directly
to the individual contract in SharePoint by clicking Open in SharePoint in the upper right corner.
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Please note that the SharePoint add-in will open each time you click on the tab.
This functionality makes it easier and quicker to review and to make changes to an individual
contract, since you no longer need to find the contract in SharePoint.
18.3.7 Search filters
The second part of the menu is dedicated to filters. These are the criteria used when creating the
overview. If these are empty, all the contracts will be displayed.
To set a new filter, you can either tap the drop-down menu in the left column and get a list of all
available filters, or you can directly enter the name of the filter.
To make a selection, choose from the drop-down menu in the corresponding right column.
Since there are many selections in the drop-down menu, you can quickly get a full list of
alternatives with explanations and choose the filters you want. Click any cell in the left column
and then press Ctrl and Space at the same time. This enables you to quickly search the filter by
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entering key words or letters (Auto complete) in the popup window. Click on the filter you want
to use and the description of the filter will be shown in the window. Then click OK.
When a filter is selected, the overview is automatically updated. To delete a filter, you can clear
the values in any of the two columns. This is most easily done by selecting the cell and pressing
Delete on the keyboard.
The drop-down menus are currently selected so that they are dynamically updated as well. This
means that if, for example, you have four categories in total among all your contracts, and these
are strictly distributed among two companies, only the associated categories will appear in the
selection menu if a company filter has already been selected.
The Title filter is a free text search, rather than a choice, and it searches the name that each
contract has been given in SharePoint. The field is read as Regex, which means that you can do
quite complicated searches if desired.
In the 2021 version, you can use the Search function on filters, columns and rows in the calculation
file to access relevant information.
Place the cursor in the cell where you want to add a lookup filter and press Ctrl + Space to see a
full list of alternatives with explanations. It’s quite flexible. You can use abbreviations to get
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alternatives. For example, write “Disc” to locate filter alternatives for the discount rate.
Write, “end date”, to get suggestions for the end date.
18.3.8 Modify columns in the view
The way the filters work, you can set up the result yourself. The Menu sheet has always been the
easiest way for the user to create their own reports. In addition to filters, you can also customize
overview, by either selecting from the drop-down menu found on all cells in the title bar for the
results or by entering the header in the cell directly.
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The user can quickly search the result in a separate menu, that appears when a cell in the title bar
is selected, by pressing Ctrl + Space. This menu is searchable and includes information on what
the result represents. You can quickly search the selections by entering the key word or letters
(Auto complete) in the pop out window. Then click the title of the result you want, followed by
OK.
After a selection has been made, the view is updated automatically. Only the Title option will
result in a link to the worksheet associated with it. To delete a column from the results, you can
select the title of the result and delete the content by pressing Delete on the keyboard.
As mentioned in the previous section, some of the results depend on what has been selected as
Period Start and Period End.
18.3.9 Archive calculation and serve links between SharePoint and calculation file
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We recommend keeping copies of previous calculations in a financial close, in order to document
the calculation for this close. Click the archive button to save a copy of the calculation that you
want to archive. The link to SharePoint is deleted in the archive calculation file, so it won’t be
updated by new information from SharePoint.
Open the calculation file that you want to archive and click Archive calculation. A window then
pops out for you to save the calculation. The name of the calculation Excel file is automatically set
as the name of the original calculation file archive date. If you want, you can change the name of
the archived calculation file before you save it.
Clicking the Archive calculation button will serve all the links to live contract data registered in all
the SharePoint libraries from the calculation model. It’s also possible to just sever the link
between the calculation and one or some specific libraries in SharePoint, so the calculations won’t
be updated with new data that are registered in those libraries.
The calculation file contains one worksheet with the live data for each of your SharePoint libraries.
You’ll have to repeat the following process and sever the links to libraries individually.
First, select the worksheet with the library you plan to disconnect (For example, “Cars and
machinery” or “Real estate”).
The contents of the worksheets containing data in SharePoint usually contains a single data table
and would look similar to the following image.
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Once the sheet is selected, you can sever the connection in one of two ways.
The first way is to right click anywhere inside the table and choose Unlink from Data Source in
the Table submenu. If this option doesn’t appear, but the Table option does, it means the sheet
is already disconnected.
You’ll be prompted with a warning, asking whether you want to complete the action or not.
The second way of disconnecting the table is to first click anywhere inside the table to make the
Word table context ribbon appear (Table Design) and then click the Unlink button on this ribbon.
If the button is greyed out, along with the other connection buttons (Refresh, Properties, Open
in Browser, etc.), it means that the sheet has already been disconnected.
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18.4 The calculation of individual contracts
18.4.1 Calculation spreadsheet for individual contracts
Each contract has a separate calculation that can be located by clicking on the contract in the
overview under Title.
This makes the calculation spreadsheet of an individual contract with all the lease details appear.
To go back to the overview, click on Menu and go directly to the reconciliation spreadsheet by
clicking Reconciliation. Please note that the tab for individual contracts will not appear and be
updated until you click on the contract in the menu. The individual contract tab can be removed
by clicking, Clear lease sheet.
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18.4.2 Data that registered in SharePoint are available for the individual contract.
Under the Use column, TRUE means that the period is included in the calculation below and FALSE
means it’s not included. The best example is an option to extend that’s included if it’s true and
not if it’s false. Please note that name of the status depends on the language you use in Excel.
In the Lease payments column, Continue means that it continues with lease payments from the
original period. If a separate payment is registered in SharePoint as illustrated below, the amount
(80000) will appear instead of Continue.
On the right side of Lease is terminated, TRUE means that the contract has been terminated, and
FALSE means that the contract has not been terminated. If the lease is terminated, the
termination date will be shown.
Other information that are registered in SharePoint will be disclosed by clicking on the button
on the left-hand side and will be hidden by clicking on the button.
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For each individual contract, you’ll find data for each period as illustrated in the overview below:
You can follow the payments pattern for each contract. The calculation starts in January 2019,
where the ROU asset is set to be equal to the lease liability (Unless a different start date is used).
If the lease is acquired through a business combination, the calculation will start on the date of
acquisition. The right-of-use asset is set to have the same amount as the lease liability on that
date.
If any manual adjustments are made to the calculation spreadsheet, the sheet with changes will
automatically marked in red. You’ll get a warning if any worksheet in the calculation file has been
changed manually.
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18.4.3 Lease payments that occur in the previous month
We can adjust the payment pattern by one month when payment of the lease is due the month
before the lease period. The advantage of this is that the lease liability is correctly measured, and
that depreciations and interest follow the months of the contract. This feature is selected
individually, contract by contract, by answering the questions as illustrated below (“Does the
lease payment occur at the end of the previous month?”).
If the lease period follows the normal quarters, but the payment is in the month before, the
calculation will appear as illustrated below:
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Please note that for leases with this option selected, there’s a difference between the lease
liability and the ROU at the date of the implementation of IFRS 16, since the requirements are in
accordance with IFRS 16 C8. Meaning that an amount equal to the lease liability, adjusted by the
amount of any prepaid or accrued lease payments relating to that lease, should be recognized in
the statement of the financial position immediately before the date of the initial application.
18.4.4 Go directly from the calculation file to the contract in SharePoint
From a calculation spreadsheet of an individual contract in the calculation file, you can go directly
from the calculation file to the individual contract in SharePoint by clicking Open in SharePoint in
the upper right corner.
Please note that the SharePoint add-in will open each time you click on the tab.
This functionality makes it easier and quicker to review and to make changes to an individual
contract, since you no longer need to find the contract in SharePoint.
18.5 Forecast and Budget (Pro version)
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The forecast spreadsheet is where you can get short-term and long-term estimates of future
financial outcomes about contracts. This is a good budgeting tool to help create and update a
company's budget. The forecast is only available in the Pro version.
You can use the Forecast spreadsheet to choose the period you want to forecast. Since the
forecast sheet uses closing exchanges rates on the same currency table as the other summary
sheets, you need to set the appropriate lookup period on the Menu spreadsheet before
generating the forecast. For example, if you set the main lookup period to 2019 and do a forecast
for 2020, the numbers in the forecast sheet will be converted with the closing exchange rates for
2019.
Choose the forecast frequency by either choosing a frequency from the drop-down menu, for
example, Quarterly, which means the data in each column is the sum forecast of three months,
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or by directly entering a number, which represents the number of months in each column, for
example "2". This way, the data in each column is the sum forecast of two months.
If "18" is entered, the data in each column is the total sum forecast of one-and-half year.
Filters can also be set. You can make selections for Company, Department, etc.
Add currency and then click Default layout to get the forecast.
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The date of the currency is set in the Menu.
You can further customise your forecast by selecting types of data from the drop-down menu
located in the cells in the first column. After a selection has been made, the view is updated
automatically. To delete a type of data from the results, you can select the type of the result and
delete the content by pressing Delete on the keyboard.
Here’s the list of the drop-down menu, where you can select and set up the forecast:
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If you are customer who have purchased an integration function, you can click Account layout to
get a forecast shown by the specific account number of your company.
Cash flow
Interest
Liability changes
Liability addition
OB Liability
CB Liability
Short-term liability
Long-term liability
Depreciation
RoU asset changes
RoU asset residual value
RoU asset addition
OB RoU asset
CB RoU asset
Monthly allocated cost
Prepaid rent changes
Prepaid rent addition
OB Prepaid rent
CB Prepaid rent
Accumulated depreciation disposal
OB Accumulated depreciations
CB Accumulated depreciations
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Note: In the account layout, there’s no currency conversion.
18.6 Export result (Integration) – additional product
There is an accounting document displayed as a sheet tab in the calculation model. This can be
used to extract the basis for the accounting for a period. We have various integration solutions,
directed to specific accounts, that can be purchased (Additional product).
18.7 Error
You might experience errors in the calculation. Errors happen when data in contracts for
calculations is missing or incorrectly recorded. Here’s an example:
Making manual adjustments to the spreadsheet won’t get you the preferred result, as they won’t
be saved. Instead, we recommend that you make the adjustments in SharePoint. By keeping the
correct input in SharePoint, you can always download a fresh calculation template and recalculate
the data. This will also facilitate the audit.
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18.8 Warnings
You might experience warnings in the calculation. The most common warning is due to a lease
where the payment pattern doesn’t agree with the end date of one or more of your periods.
Here’s an example:
This lease is from June 6th 2019 to May 31st 2022 with quarterly payments. Because the lease ends
in the middle of the last quarter, the model can’t ensure that the final cash-flow element is
correct. The model anticipates that it should be 2/3 of the full quarterly payments, but a warning
is still shown, indicating the potential for a mistake, either in the input data or in the assumption.
18.9 Changes
The Changes spreadsheet gives an overview of all the changes to contracts done via Track
changes, as illustrated below (Chapter 13 and 14), as well as all the new contracts.
You can use the Changes spreadsheet by selecting the period when the changes happen:
You can change the overview by adding filters to Search filters. To set a new filter, you tap either
the drop-down menu in the left column and get a list of all available filters,
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or you click any cell in the left column and then press Ctrl and Space at the same time to quickly
search. Then you choose filter by entering the key word or letters in the pop out window. Click on
the filter you want to use, then click OK.
After the filters are chosen, you can select from the drop-down menu in the corresponding right
column:
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When a filter is selected, the overview is automatically updated. To delete a filter, you can clear
the values in any of the two columns. This is most easily done by selecting the cell and pressing
Delete on the keyboard.
You can also customise the view by adding new columns in Search results. You’ll find a detailed
guidance about this in chapter 18.3.7.
18.10 Reconciliation
The Reconciliation spreadsheet is where you reconcile your opening balance with your closing
balance for any given period. This is a powerful tool to make the reconciliation process easier, and
this can also be an important tool for your auditor. If you use Average exchange rate under
Settings, the currency effects for the lease liability and the Right of use asset are shown in the
Reconciliation template. Gain and loss in case of a termination of a lease or a sublease is shown
in the same template.
Choose the period you want to reconcile:
Please note that if you want a reconciliation for a fiscal year, you need to set the lookup periods
from January to December for the actual year.
Add other filters (Please read chapter 18.3.6 for detailed instructions on setting up Search filters):
Add currency:
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The date of the currency is set in Menu.
You can directly click the individual contract by clicking the file name and go back by clicking
reconciliation in the individual contract tab.
18.11 Note disclosures
This is an example of a minimum note disclosure for 2019 and going forward (ROU asset
specification included) after IFRS 16, which can be included on a stand-alone basis or
implemented in other footnotes.
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Please note that unfinished verbal descriptions need to be completed individually.
Choose the period to disclose by using the Lookup periods:
Choose the range for the maturity analysis for debt here:
Enter a percentage in the cell behind Discount rate adj. for sensitivity analysis.
It’s also possible to add filters (Please read chapter 18.3.6 for detailed instructions on setting up
Search filters)
and currency
(The date of the currency is set in the Menu).
Short term and low asset value leases must be manually corrected, based on the information in
the accounting system, for leases that are not separately registered in SharePoint. Short term
and low asset value leases don’t include any interest of depreciation in the menu. It’s only the
payment that is disclosed, and the information is used for disclosure purposes.
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Please note that expenses to short term and low asset leases is an ongoing reporting requirement,
according to IFRS 16.
18.11.1 Critical judgment and accounting estimates
In accordance with IAS 1, an entity must disclose information about assumptions it makes about
future, as well as other major sources of estimation uncertainty, at the end of the reporting period
(IAS 1.125).
In the footnote disclosure, you can locate the information about the effect of options to extend
“Not yet committed to” and “Effect of the change of interest rate”. This is helpful in terms of
concluding what’s not significant and in terms of disclosing information you deem significant.
The following calculations are made:
Options to extend not yet committed to, discounted liability effect.
This provides the discounted effect of all options that are registered but not yet committed to. By
registering all options to extend, you are remined of the options on the front page, as well as
having them included in the disclosure.
The effect of not yet having committed to the options to extend is calculated as the discounted
cash flow of the instalments in the option period, discounted from the perspective of what it
would have been at the end of the option period. For example, if the lease initially ends in
December 2020 and has an unused option to extend by two years, then (For the 2019 note
disclosures) the two years of additional cash flow will be calculated as being discounted by the
entirety of 2020. In this case the effect will be:
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Effect =1
(1 + 𝑟)12∑
𝑥𝑖
(1 + 𝑟)𝑖
23
𝑖=0
,
where 𝑥𝑖 is the rent for the 𝑖'th month from the start of the option period, and 𝑟 is the monthly
discount rate. The general formula is:
Effect =1
(1 + 𝑟)𝑚∑
𝑥𝑖
(1 + 𝑟)𝑖
𝑁−1
𝑖=0
,
where 𝑚 is the number of months from the note disclosure date to the start of the option period,
and 𝑁 is the total number of months in the option period.
For Excluding options to extend committed to but not yet started, discounted liability effect it’s
the same logic but in reverse. Instead of calculating the liability effect of an unused option, we
calculate the liability effect of all periods, marked as extension options that has not yet started,
at the end of the note disclosure lookup. This will be a negative result.
Options to terminate not yet committed to, discounted liability effect and Excluding options to
terminate committed to but not yet occurred, discounted liability effect are all calculated in the
same way. In these cases, it’s the discounted liability effect of either exercising an unused
termination option or removing one that’s included. This is only applicable for future termination
options, i.e. terminations that occur after the end of the note disclosure dates.
Effect on lease liabilities if the discount rate increases/ decreases by 1 %
This calculates the effect of increase and decrease of the discount rate for all leases with a chosen
change in the discount rate. It doesn’t include the option to extend not yet committed to or other
judgemental options that are not included in the lease liability. The NPV of the option to extend
not yet committed to is calculated using the discount rate registered on the contract.
The change in discount rate can be set to a different percentage in Discount rate adj.,
and you’re free to use any filter you want in order to review the effect of a certain category of
lease liabilities.
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The effect is calculated as the change in discounted cashflow by adding and subtracting the
requested percentage from the yearly discount rate. If 𝑅 denotes the yearly discount rate and 𝑟
the monthly discount rate, they are related as 1 + 𝑅 = (1 + 𝑟)12 . We use this equation to
calculate 𝑟+ (The resulting monthly discount rate after an increase of the yearly discount rate) and
𝑟− (The monthly discount rate after a decrease),
𝑟± = √(1 + 𝑅 ± 𝑝)12
− 1 ,
where 𝑝 is the adjustment percentage. When 𝑟± has been determined, the effect is calculated as:
Effect± = ∑𝑥𝑖
(1 + 𝑟±)𝑖
𝑁−1
𝑖=0
− ∑𝑥𝑖
(1 + 𝑟)𝑖
𝑁−1
𝑖=0
.
In this equation, 𝑥𝑖 is the rent due at the 𝑖'th month after the note disclosure period, and 𝑁 is the
total number of months remaining of the lease.
Below is an example with a filter set on discount rate category and the discount rate adjustment
set to 0.5%.
Other information
This provides additional information.
Estimated residual value guarantees included in the maturity analysis
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This is simply the undiscounted estimated residual value guarantees included in the cash flow in
the maturity analysis section.
Purchase options included in the maturity analysis
This is the undiscounted purchase price for leases with purchase options included in the cash flow
of the maturity analysis section.
The weighted average lessee's incremental borrowing rate applied to lease liabilities recognized
in the statement of financial position at the date of initial application
This is the discount rate averaged over all leases, or the ones present after a filter has been
applied, weighted by the lease's remaining liability at the end of the note disclosure period. This
is calculated with the following formula
�̃� =∑ 𝑟𝑖𝐿𝑖𝑖
∑ 𝐿𝑖𝑖
,
where �̃� is the weighted discount rate, the sum is over all leases, 𝑟𝑖 is the discount rate for lease
𝑖, and 𝐿𝑖 is the remaining liability for lease 𝑖.
18.13 Fixed assets footnote (Pro version)
In the Pro version, the fixed asset note appears in a separate spreadsheet like this:
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This is consistent with the fixed asset footnote according to IAS 16. The useful life is calculated
based on the length of the contract or based on the useful life set separately. Effects of
movements in foreign exchanges rates are split between accumulated cost, accumulated
depreciations and impairment loss.
18.14 Other information about Calculation
18.14.1 The DCF model
The DCF (Discounted Cash Flow) model calculates by using the end day of the month for the
payment. This results in calculation of interest for the last period of the payment series as well.
It’s possible to change the calculation model to have the payment in the beginning of the period.
Answer Yes to the question “Is the lease pre-paid?”.
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18.14.2 Depreciations
The monthly depreciation is linear for the duration of the contract term, which is based on the
length of the contract.
You can specify the depreciation dates separate from the dates of the lease payment. This can be
useful for stopping depreciation in a period and starting again for contracts that are impaired, or
for changing a depreciation period under a construction period. Please note that for most lease
contracts, the depreciation will be equal to the lease term. So don’t use this functionality unless
your contract falls under the exceptions to IFRS 16.
You can postpone depreciations at the beginning of the contract by entering a "Start date of
depreciations" that’s different from the start date of the lease. You can also pause depreciations
in the middle of the useful life of the contract by registering a change by entering a start date of
depreciations. The depreciation will then be paused on the change date and restart on the start
date of depreciations.
If the useful life is longer than the lease term, you can extend the depreciation at the end of the
contract by entering an "End date of depreciations" that comes after the end date of the lease.
18.14.3 Fixed adjustments
If a lease contains a fixed adjustment, you can specify the fixed adjustment by setting the
frequency, adding fixed adjustment in a percentage or an amount and by adding the start and end
dates of the adjustments (If different from the end date of the lease). If there’s a fixed amount of
the lease payments that’s not supposed to be regulated, you can register the fixed amount to be
exempt from the adjustments. More guidance is available by clicking on the question marks.
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18.14.4 Daily rates
Customers can have a version with daily rates for leasing. This is useful when lease payments vary
with the number of dates in a month. Daily rates are found in the Information about the lease
liability section and must be answered Yes to for each contract.
After you have chosen daily rates, your lease payment is automatically set to be the rate you pay
each day. The next thing you need to do is to decide the payment structure (Monthly/ quarterly).
You’ll notice that the lease payments, interest and instalments vary from month to month, while
the depreciations remain the same, month by month.
18.14.5 Go back to an old calculation
If you need to go back to an old calculation, you can store different versions or use version control.
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You locate the version control in the menu behind the file in SharePoint by clicking on the three
dots.
In Version control, you can view, restore or delete any version of the calculation by using the
drop-down menu. For example, by restoring version 3.0, you can copy it as the newest version,
and it will appear at the top of the list. In the example illustrated above, after clicking Restore,
you’ll get a new version (13.0), which is the same as version 3.0.
18.15 Storing calculation
We highly recommend saving a copy of the calculation used for a financial close.
Before you store the calculation, make a copy for the next financial close by using the cogwheel.
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Use copy with files.
Change the file name by clicking the pencil and edit, then click Copy.
Change metadata, such as file name and period.
Click Save.
Lock the old file to avoid updates.
The file will then appear as follows:
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You can archive a copy of the calculation or delete the link between the calculation and SharePoint
by following the instructions in Chapter 18.3.8.
18.16 Include other non IFRS 16 contracts in the calculation file
In the 2021 version, other non IFRS 16 contracts can be linked to the calculation file in the same
way that you would link to any other libraries. Please note that this contract app is newly
launched, with an updated version with improved functionality, and that the new version has to
be implemented to utilize this functionality.
You need to upgrade the contract add-in to use the new payment. The payments should look like
this:
Use the Other payments (Non-IFRS16) filter to access the data in the Menu spreadsheet. If
contracts are in a foreign currency, the data is translated using the average exchange rate for the
month, if that is chosen under Settings, or the closing rate for the month determined in the Period
end field, if that is the choice.
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If you choose periods that go well into the future, you can index regulate these contracts using
the Mass index adjustment function. We recommend setting the cash flow for new and existing
contracts for the budget /business plan periods to 3 years. Use notifications to review the
contracts at specific intervals.
19. Review and audit
The calculation model is run on the dataset that’s uploaded in SharePoint, and you should get the
same answer by downloading a new model and run the dataset against that model. If manual
adjustments are made, this should be easy to identify.
We believe this will facilitate the control, as well as the audit, of the outcome.
20. FAQs (Frequently asked questions)
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20.1 I have established a new library with contracts in SharePoint, but they ’re not
included in the calculation, even if I press Update leases .
Solution:
You need to establish the link between the new library and the calculation.
Open the calculation model in Excel (Not Excel Online).
Open the new library in SharePoint, and then read Chapter 18.2 for detailed instructions on how
to establish a link between SharePoint and the Excel calculation file.
20.2 When a new contract should be registered in Share Control
A contract should be entered when it has been signed, even if the payment of the contract starts
at a future date. If the underlying asset’s not in use when the payments start, the depreciation of
the underlying asset can be delayed by setting a later start date.
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Contracts that has a start date in a future period is not included in the liability or ROU asset, but
are disclosed in the footnote
