Presentation: Lease Accounting Standards

© 2015 Nakisa Inc. All rights reserved.

Upcoming changes in lease accounting standards: How technology can help with costs savings today and regulatory compliance tomorrow

#NakisaFIN

http://www.nakisa.com/


@NakisaInc#NakisaFIN

Providing solutions since 2001

Headquartered in Canada

Leader in HCM and Financial Solutions

700+ enterprise customers

subscribers4M+

Available in

languages18

Active users located in

125

Caters to

24+ industries

countries


© 2015 Nakisa Inc. All rights reserved. 3

Update on lease accounting regulations

Market trends

Recommended compliance action plan

How technology can help you be compliant

SAP® Lease Administration by Nakisa®

Key takeaways

Agenda

#NakisaFIN


4© 2015 Nakisa Inc. All rights reserved.

Missed the webinar?

Listen to the full on-demand webinar

Watch now >

#NakisaFIN


http://www.nakisa.com/webinar-lease-accounting-standards?utm_source=Webinar-Leasing&utm_medium=Slideshare&utm_campaign=Slideshare-Webinar-Rev%20Rec




Update on lease accounting regulations

#NakisaFIN



Pending regulatory changes for leases affecting all lease contracts

New IFRS/GAAP standards for Lease AccountingCurrent reporting of operating leases• Reported off balance sheet• Disclosed in notes of financial statements

Upcoming changes• Required to capitalize many of these

operating leases• Record in balance sheet as assets and

liabilities

“The IASB plans to issue the new Leases Standard before the end of 2015.”IFRS Leases Project Update: Practical implications of the new Leases Standard. March 2015

#NakisaFIN



Business pain points Lease administration

• Geographically and departmentally dispersed lease contract information, requiring manual processes for data management.

• Lack of visibility into lease data, due to large volume of equipment and property lease contracts.

• No ability to conform to the upcoming lease accounting standards.

• No ability to efficiently manage leases now or for the long term, resulting in unnecessary costs.

• No ability to conduct what-if scenarios or impact analysis, for sound lease-versus-buy decisions.

7© 2015 Nakisa Inc. All rights reserved.#NakisaFIN




Webinar pollDo you expect the leasing regulation will have an impact on your financial ratios?



Expected impact of lease accounting standard

Source: Deloitte. Lease accounting survey. Preparing for implementation. 2014

#NakisaFIN



Industry impact

RetailLeased assets:• Real estate• Equipment

Challenges:• Lack of awareness of the impact• High amount of individual and

dispersed lease contracts• Currently no IT systems to manage

contracts

TelecomLeased assets:• Real estate• Equipment

Challenges:• Reassess operating leases vs.

service contracts• 2 new accounting standards that

will impact accounting processes and require contract data abstraction

• IT systems for data capture and reporting required

Cargo & TransportationLeased assets:• Real estate• Equipment

Challenges:• High amount of operating leases

currently not reported on balance sheet

• Lack of awareness of the impact• IT systems for data capture and

reporting

#NakisaFIN



Market trendsA closer look at leasing and industry trends

#NakisaFIN



Leasing market 2015

Volume of equipment to be leased in 2015 expected to increase

Market conditions are positive and new opportunities are emerging

Upcoming change in lease accounting regulations

Investment in equipment to replace aging assets and aid in expansion

#NakisaFIN



Webinar pollApproximately how many leased assets do you have in your organization



Recommended compliance action plan

#NakisaFIN


© 2015 Nakisa Inc. All rights reserved.Source: Deloitte. Lease accounting survey. Preparing for implementation. 2014

Compliance will require companies to undertake a variety of activities in such areas as lease data collection, reporting, IT systems, technical accounting, and training, as well as overall program management of the implementation process.

“#NakisaFIN



Compliance action planPl

anni

ng &

as

sess

men

tTe

am

Educ

ation

IT sy

stem

s &

requ

irem

ents

Syst

em

requ

irem

ent

ERP/

softw

are

vend

ors

Syst

em

impl

emen

tatio

n

Cont

ract

dat

a ab

stra

ction

16© 2015 Nakisa Inc. All rights reserved.#NakisaFIN




Webinar pollWhat stage of the compliance action plan are you currently at?



How technology can help you be compliant

#NakisaFIN


19© 2015 Nakisa Inc. All rights reserved. 19© 2015 Nakisa Inc. All rights reserved.

What to look for in lease administration software?

1. Unified database for all lease operations

2. Collaboration during the process of data collection

3. Strategic insight for sound decision-making

4. User-friendly interface with minimum training required

5. A solution that adapts to your business

#NakisaFIN




Solution capabilities for abstraction of lease contractsSAP® Lease Administration by Nakisa®

Increased visibility

Collection and Unification

Validation and

Traceability

Collaboration

Collection & unification Designed to provide visibility into your lease and revenue contract

exposure

Automated and effective data collection

Unification of data in one single repository

Collaboration Open collaboration framework to engage and align business decision-

makers

Simulation capabilities to analyze best response to business changes

Efficiently evaluate lease vs. buy scenarios

Validation & traceability Validated true and useful data Efficient traceability for compliance Readiness for reporting requirements

#NakisaFIN



SAP® Lease Administration by Nakisa®Overview

#NakisaFIN



Leasing Administration requirements overviewFive major use cases

Lessor

Lessee

Available today

SAP Real Estate Management

SAP Leasing

No standard solution

SAP Lease Administration by Nakisa

Leasing Property Non-Property

1 2

3 4

5

#NakisaFIN



Leasing Administration requirements overviewFive major use cases

Lessor

Lessee

Planned innovations

SAP Real Estate Management

SAP Leasing



Leasing Property Non-Property

1 2

3 4

5

Lab preview

#NakisaFIN



Accounting and financial close process

Reporting and Analysis

Entity Close Management

Disclosure Management

Notes Management

ConsolidationIntercompany Reconciliation

General Ledger

Sub-Ledger

Revenue Recognition

Leasing

Financial Accounting Entity Close Corporate Close Reporting &

Disclosure

Internal Controls

Master Data Governance for FinancialsFinancial Close

Governance

#NakisaFIN



Solution focus areas for lessee administrationSAP® Lease Administration by Nakisa®

I. Document Management and User InteractionII. Payment Processing and Invoice ReconciliationIII. Asset Accounting: Creation, Update, Retirement

IV. Management Reporting and Analysis

Lab preview

#NakisaFIN



Dashboard componentLab preview

#NakisaFIN



Click icon to add picture

Lease administration system

• Enter and administer leases

• Track lease changes (modifications, activations, terminations)

• Approvals of financing terms

• Manage events during operation of a lease

Lab preview

#NakisaFIN



Key benefits1. Integrated with SAP ERP Financials2. Prepare for upcoming Lease Accounting regulations3. Costs and time savings through greater visibility and

improved decision making4. Centralizes the administration of Capital and Operating

leases5. Addresses lease administration concerns:

• Casualties• Refinancing• Services charges• Asset info updates• Invoice reconciliation• Payment alerts • Approval processes

Lab preview

#NakisaFIN



Co-innovation model Phase 1: Engage Phase 2: Prototype Phase 3: Deliver

• Meetings with SME

• Documentation of processes

• Documentation of requirements

• Unification of requirements

• Functional & technical validation

Customers

• Feedback• Solution design• Sign off to next

stage (agree to keep going)

• Use cases/ user stories

• Solution design

Multiple customer feedback consolidation

• Functional validation• Roadmap & partner endorsement • Expertise

• Prototype/mockups• Documentation• Testing platform• Organize

testing/review

• Prototype validation• Feedback/re-validation

• Prototype improvement

• Engineering preparation

• Solution architecture• Technology leadership

• Development• QA• Documentation

• Execute POC• Run use cases• Feedback

Evaluate feedback

Product on SMP

Prototype construction TestingRequirements

gatheringRequirements

validation Engineering PoC Product on SMP

Estimated duration

6 – 12+ months1 – 3+ months1 - 3+ months

NDA

Pre-requisites

Nakisa Solutions

SAP engaged where applicable

#NakisaFIN



Key takeaways

#NakisaFIN



Key takeawaysBe prepared

Lease Accounting standards are expected to be announced in 2015

Ensure readiness for compliance, including reviewing your parallel reporting strategy

Collect and centralize your lease contracts Supports on-premise and cloud deployment

(HANA Cloud Platform)

#NakisaFIN



Missed the webinar?

Listen to the full on-demand webinar

Watch now >

#NakisaFIN






Next steps

WHITEPAPERGetting smart about revenue recognition and lease accountingwww.nakisa.com/whitepapers-revenue-recognition-lease-accounting

WEBINARNew revenue recognition standards: What the rule changes mean for your businesswww.nakisa.com/webinar-revenue-recognition-standards

Contact us: [email protected]

#NakisaFIN

http://www.nakisa.com/whitepapers-revenue-recognition-lease-accounting

http://www.nakisa.com/webinar-revenue-recognition-standards

mailto:[email protected]




The information in this presentation is confidential & proprietary to Nakisa, & may not be disclosed without the permission of Nakisa. This presentation is not subject to your license agreement or any other service or subscription agreement with Nakisa. Nakisa have no obligation to pursue any course of business outlined in this document or any related presentation, or to develop, release or implement any functionality mentioned therein. This document, or any related presentation & Nakisa’s strategy & possible future developments, products & or platforms directions & functionality are all subject to change & may be changed by Nakisa at any time for any reason without notice. The information in this document is not a commitment, promise or legal obligation to deliver any material, code or functionality. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement. This document is for informational purposes & may not be incorporated into a contract. Nakisa assume no responsibility for errors or omissions in this document, except if such damages were caused by Nakisa intentionally or grossly negligent.

All forward-looking statements are subject to various risks & uncertainties that could cause actual results to differ materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates, & they should not be relied upon in making purchasing decisions.

#NakisaFIN


Economy & Finance

Presentation: Lease Accounting Standards