IFRS16 - Introduction

Steve Lambillotte, Senior Solution advisor Finance & GRC

December 2017
Agenda

The New IFRS Leasing Standard

Solution Overview SAP Real Estate Management

Solution Overview SAP Lease Administration by NAKISA

Summary

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The Leasing Event of a Generation – Driving Significant Change

US-GAAP
PAST FUTURE
IFRS
Accounting

OPERATING Real Estate

LEASE
Purchasing
FINANCE
LEASE

New standard on leasing released by Need to capitalize many corporate Besides affected accounting, new
FASB and IASB operating leases and record these lease standards will transform corporate
obligations on the balance sheet as business processes in many
Every IFRS/ US-GAAP reporting assets and liabilities areas
company renting real estate or leasing
equipment will be impacted

Large companies with big property

portfolio are affected most and need to
react quickly to prepare

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The Roadmap
Get ready for the new Standards

PLAN TRANSITION AND BUILD RUN

Valuation and
Classification

Contract
Management
Multi-GAAP
Posting
Implement
Initial
ANALYSIS Perform
Valuate
PHASE Abstracting
Contracts
Change Management Start Contract Management

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IFRS 16 Compliance – More than a posting tool …

Real Estate Other Leasing

Leasing
Other Leasing High Volume

IFRS 16
SAP Leasing Admin. By
NAKISA
Contract Management SAP Real Estate Mgt

Maintenance, Alerts, GIS, SAP Real Estate

CAD, Occupancy, …. Management

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 SAP Real Estate Management Mapped to Customer Needs

Portfolio Management Real Estate Analytics Master Data Management Partner Management Transaction Management

Commercial Real Condition Percentage Cost Third Party

Real Estate Search Lease Management Legal Compliance
Estate Management Adjustment Rent Recovery Management

Corporate Real Estate

Space Management Room Reservation Move Management
Management

Facilities Management Construction Modernization & Refurbishment Maintenance & Repair Service Management

Integration to SAP Industry

Support Processes Accounting Controlling Tools
Solutions

SAP Real Estate

Management
Solution Map
 IFRS Leasing
SAP Real Estate Solution
SAP FINANCE
SAP Real Estate Management is a
subcomponent of SAP Finance – IFRS & US GAAP Leasing

simplifying your solution landscape by: Lease Portfolio

Contract-
Management GENERAL LEDGER
In RE-FX (MULTI-GAAP ACCOUNTING)

– Real-time valuation of finance leases Lease

Administration
Reporting
Payment
Generation
ACCOUNT
PAYABLE/RECEIVEABLE
– Elimination of financial interfaces
– Reducing the number of applications in CONTROLLING & PROFIT CENTER
ACCOUNTING
system landscape Lease Review
Asset
Accounting
REPORTING
Asset Asset
Reporting
Classification Valuation

Coordination between the Lease Administrator and Asset Account is critical for proper classification and
valuation. Sharing a common platform eliminates operational silos between these critical players.

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SAP Real Estate Solution Approach
Integrated Leasing Scenario

Multi-GAAP Posting

▪ Multi-GAAP enabling (IFRS, US GAAP, HGB)

▪ Manage right-of-use assets and liabilities
▪ Customer / Vender accounting
Contract Management ▪ Post depreciation and repayments
▪ Lease payments
▪ Different lease types for lease in and
lease out ▪ Controlling / Profit center accounting
▪ Leasing partners
▪ Subject of agreement like Valuation and Classification
cost center, property, WBS Elements,
equipment, internal Orders, etc…
▪ Classification and evaluation rules
▪ Terms and conditions for notice
and renewal options (validity) ▪ Calculate and report on net present
value, depreciation, repayment and
▪ Lease payment cash flow interest rate
with full integration
▪ Change management / Re-valuation
▪ Critical dates and reminders
▪ Support transition scenarios
▪ Document management
▪ Create / Link to fixed assets

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IFRS Leasing
Contract Design

Contract Structures Right Creation or assignment Asset creation/

Subjects of Use Assets of RoU asset assignment

Contract Combining legal and

terms accounting terms
Valuation Rule

Erzeugung
Kondition Conditions are the base Current and historic
Erzeugung
Bewertung
Conditions Erzeugung
Bewertung
for valuation calculation valuations
Bewertung
Create valuation

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Equipment Processes NOT Supported by SAP Real Estate Management

• Asset Sale or Lease Back

• Equipment Location Management

• Capabilities to handle asset events such as casualties, swaps, and asset replacement

• Partial Damage of Assets

• Termination with Return of Asset

If your requirements include these scenarios,

customizations in your landscape will be required in SAP
Real Estate Management to support these processes!

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SAP and Nakisa partnering to deliver

Worldwide Solutions Provider

800+ customers, 24+ Industries, 125+ Countries
SAP Solex Partner Since 2007

Jointly developed with SAP

Part of the product and enhancement pack roadmap

Meets SAP premium qualification

Validated against SAP’s product standards for security,
performance, supportability, accessibility and documentation

Sold and supported by SAP

Around the globe

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Solution Overview
Main Components & Core Use-case

Contract
Plan & Equipment Payments & Event
Creation &
Budget Tracking Reconciliation Management
Classification

• Business case • Data capture • Onboard/Install • Read/Create • Asset events

• Funding • Lease structure equipment Accounting • Payment events
• Fleet Planning • Accounting calculations • Measurements documents(recurri • Contract events
• Lease vs Buy • Classifications & • Capture ng , one time
• Analytics Approvals Equipment info docs)
• Reports • Manage
accounting
impacts

SAP Lease
Administration by PUSH PULL
Nakisa Other
Web Services, ERPs
Excel, RFC ,.CSV

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SLAN leveraging SAP ERP modules

SAP Lease Administration by Nakisa

General Asset Accounts Material Equipment

Ledger Accounting Payable Management Management
• A complete • Track, capitalize, • Execute • Read/Create PO • Track serial
record of and manage payments • Approve/Releas numbers,
financial ROU/Asset • Internal AP e PO usage,
transactions accounting reporting • Link Lease maintenance,
• Internal Contract to PO etc.
/external materials • Link assets to
reporting equipment

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Landing Page / Summary View

Configurable Alerts

Fully searchable and easy-

to-filter list of contracts

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Excel based Mass Upload Capability

Easy excel upload

functionality

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Uploading signed documents and tagging Information

Tag attached documents to

make collected data traceable

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Extensible Data Collection Forms

Easy-to-fill data forms

that connect to ERP

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Support for Lease Determination

Lease determination support

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Classification & Approval Process

Contract Summary

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Generation of Amortization Schedule

Amortization schedule

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Automated Posting in SAP AP and Treasury Modules

Integration with AP and Treasury

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Analytics: Payments dashboard

Easily track key payment

information with configurable charts
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Solution Summary
AP Lease Administration by Nakisa
COST SAVINGS &
AVOIDANCE
• Leverage existing
investments in financial
processes (ERP).
• Reduce risk of
penalties and undue
payments through
alerts and notifications
• Save time and costs by
centralizing all
contracts data in one,
single repository
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STRATEGIC POWERFUL
COMPLIANCE & STREAMLINE &
INSIGHT & TECHNOLOGY &
REPORTING SIMPLIFICATION
DECISION-MAKING INTEGRATION
• Evaluate impact on • Prepare for upcoming • One system for • Finance and
financial statements lease accounting accruals, payments, accounting automation
with a global view on standards and financial reconciliation and through full push and
all lease contracts transparency financial reporting on pull ERP integration
regulations leases
• Create what-if • Faster adoption and
scenarios to analyze • Maintain an audit trail • Simplifies asset high configurability
financial implications of changes and tracking and
and make more decisions for accounting in ERP • Flexible deployment
informed business- traceability Fixed Assets options: cloud, on-
decisions premise or hybrid
• Streamlines internal
• Gain visibility into reporting through SAP
lease liabilities and ERP
commitments
24
Thank you.
Contact information:

Steve Lambillotte
SAP Senior Solution Advisor GRC & Finance
+32 486 13 65 18
Steve.Lambillotte@sap.com