Nakisa Lease Administration: A Single Solution for …...Nakisa Lease Administration is a purpose...

Nakisa Lease Administration: A Single Solution for End-to-end Lease AccountingProduct Features and Benefits Guide

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Table of Contents

Holistic Accounting and Compliance 3

Value Propositions 4

Business Benefits 5

End-to-end Lease Accounting 8

Solution Capabilities 9

Data Abstraction 10

Lease Determination 10

Lease Terms & Conditions and Contract Management 10

Event Management 11

Reporting and Analytics 11

Technology 12

Contact Us 12


Nakisa Lease Administration is a holistic lease management, accounting, and reporting solution designed to support regulatory compliance with the new leasing standards (IFRS 16 and ASC 842). As a comprehensive lease accounting solution, Nakisa Lease Administration helps organizations manage global lease portfolios, gain strategic insights into financial data, and streamline lease accounting operations.

Nakisa Lease Administration addresses the entire lease lifecycle from from inception and classification to change events and disclosure reporting. The solution is able to handle complex contract structures, such as large asset volume, and unique combinations of asset types. In addition, the solution can easily manage unique contract payment terms, including index rate changes.

In 2008, the IASB and FASB initiated a joint project to develop new standards for leases to meet the objective of improved transparency, comparability, and financial reporting. The lease accounting standards known as IFRS 16 and ASC 842 became applicable for most entities in January 2019. In addition to presenting a new set of challenges in the short-term, the changes in lease accounting offer an opportunity for organizations to streamline and simplify ongoing lease accounting operations.

Nakisa Lease Administration is a purpose built end-to-end lease accounting and administration solution that provides access to company-wide lease data, with the visibility and traceability needed to support and comply with the new lease accounting standards.

Holistic Accounting and Compliance


Value Propositions

Global Visibility and ControlCentralize contract data in a single repository to provide a global view of lease contracts. Gain clear visibility into lease liabilities and commitments.

Strategic Insights and AnalyticsGain insight into contractual data to identify lease exposure and analyze the impact on financial statements. Understand financial implications and make informed decisions.

Accounting Excellence Handle comprehensive lease accounting requirements, support transition accounting under IFRS 16 and ASC 842, and process required accounting lookback.

Efficiency and SavingsReduce costs by making lease data accessible and actionable for stakeholders. Shorten the timeline from data collection to lease accounting with cloud technology and standalone mode.


Nakisa Lease Administration provides a single point of entry to centralize and optimize global lease portfolios while enabling corporate compliance with lease accounting standards. With key integration capabilities for leveraging existing technology investments, the application supports lease administration and accounting, increases visibility into lease exposure, and reduces the risk of penalties and undue payments.

Business Benefits

Global Visibility and Control

Easily manage the entire lease lifecycle using a centralized repository for all fixed, variable, short-term, low-value and service contract leases

Communicate securely with key stakeholders across departments using tagging and comment functionalities

Use the lease determination questionnaire to identify short-term, low-value and in substance leases, and ensure that lease classification is standardized across an organization

Secure confidentiality, segregate duties, and reduce the risk of material misstatements using multi-layer approval groups

Support accurate tracking and advance lease modification and reassessment options using elaborate contract structures


Strategic Insights and Analytics

Monitor leases throughout the lease lifecycle using management dashboards and quickly identify leases requiring attention

Estimate key values and assumptions by manipulating and summarizing lease data in a visual form

Perform variance analysis and reconciliation quickly and easily using preconfigured reference reports

Accounting Excellence

Streamline compliance with embedded lease accounting classification between US GAAP finance and operating leases using the bright line test criteria

Obtain required compliance disclosure reports through flexible data manipulation to enable key internal decision making

Perform initial and subsequent measurement of ROU assets and lease liabilities in accordance with IFRS 16 and ASC 842

Facilitate lease modification and remeasurement requirements as defined in the new lease accounting standards

Automatically reclassify long-term and short-term lease liabilities and the accruals of interest expenses on a monthly basis


Reduce the risk of penalties and undue payments through alerts and notifications

Accelerate the transition to the new lease accounting standards with standalone mode and simplify ongoing lease portfolio reporting maintenance

Gain an increase in efficiency and higher return on lease management processes with a consolidated view of lease portfolios

Track the costs of individual leases to enable global strategic decision making

Eliminate the need to discuss hardware requirements and software compatibility with cloud deployment

Efficiency and Savings


End-to-end Lease AccountingLease accounting standards specify how reporters must recognize, measure, present, and disclose leases. An end-to-end lease accounting system, Nakisa Lease Administration is designed to support compliance with IFRS 16 and ASC 842.

The overall impact and effort of accounting under IFRS 16 and ASC 842 is far more expansive than simply centralizing contract data and handling the recalculations of lease payment schedules. Nakisa Lease Administration is able to support ongoing lease accounting and management while ensuring all requirements of lease accounting standards are met.

EVENTS Modification/ Reassessment

SUBSEQUENT MEASUREMENTINCEPTION LEASE END

IFRS 16 and ASC 842 provide guidance on how to measure and record ROU assets and lease liabilities at the inception stage, as well as subsequent measurements, modifications, and reassessments.

As outlined in IFRS 16 and ASC 842, a reassessment occurs when there is a change in cashflows related to the initial contractual terms and conditions. A modification, on the other hand, results from renegotiation of original contractual terms and conditions.

The following functionalities are included out-of-the-box to support compliance initiatives:

Compliance Requirements Functionality

Lessee classification:

IFRS 16 (low-value vs short-term vs long-term leases)

ASC 842 (short-term vs finance vs operating leases)

a

Periodic postings for low-value leases, short-term leases and service contracts aInitial measurement and recognition of ROU asset and lease liability aSubsequent measurement of ROU asset and lease liability (ASC 842 finance & IFRS 16) aSubsequent measurement of ROU asset and lease liability (ASC 842 operating) aLease reassessments aLease modifications aImpairment recognition aLease termination aDisclosure reports a


The solution’s deep functionality addresses the entire breadth of enterprise lease accounting requirements. Nakisa Lease Administration’s ability to support end-to-end lease accounting with ease out-of-the-box, enables organizations to focus on the reduction of both short-term and long-term costs for ongoing lease accounting and management processes.

Solution Capabilities Nakisa Lease Administration allows organizations to effectively centralize and manage enterprise-wide leasing activities. Nakisa Lease Administration is designed to provide clarity into lease portfolios through comprehensive analytics and reporting mechanisms. The following sections outline the solution’s capabilities in the context of the lease lifecycle to help conceptualize the use of the solution for end-to-end lease accounting.

Data Abstraction Lease Determination Lease T&C and Initial

Recognition

Accruals, Amortization &

Event management

Reporting

Transition Accounting


Data AbstractionFeature DescriptionCentralized Data Repository

Manage contracts and group leases together using a variety of criteria to allow for the posting of accruals and payments in bulk.

Mass Data Upload Users are able to streamline the data collection process by uploading external files, such as spreadsheets or flat files, to create contract files, leases, assets, and payment terms.

Data Tagging Tag and highlight areas of PDF documents that are uploaded against a lease object to make data traceable and facilitate any internal or external audits.

Lease DeterminationFeature DescriptionLease Determination Questionnaire

A questionnaire to help determine lease types and ensure standardized lease classification across an organization. Based on the answers provided, Nakisa Lease Administration displays a suggested lease type.

Embedded Lease Management

Embedded leases can be cross-referenced with lease elements that reside in Nakisa Lease Administration.

Service Contract Management

Service contracts can be processed through Nakisa Lease Administration without recognizing anything on the balance sheet. The application can be used as a single repository for all types of leases.

Lease Terms & Conditions and Contract ManagementFeature DescriptionContract Structure Manage contracts using a multi-level contract structure to facilitate reporting under

IFRS 16 and ASC 842: Master lease agreements (MLA), contracts, lease components, and activation groups.

Lease Terms & Condi-tions

At contract inception, the following terms can be added or uploaded via an Excel file: Base rent, extensions, payment reductions, payment supplements, pre-payments, index payments, free rent, cash incentives, initial direct costs, termination options, and purchase options.

Activation Groups A group of units within a lease component that have identical financial and accounting information. When a group of units are activated on the same date they are grouped together in an activation group. Users are able to split, cancel, assess, and classify activation groups.

Componentized Items Allows users to break down one component into multiple sub-components, where each sub-component generates a unique asset number in SAP, allowing users to track and maintain different lease properties in a single lease contract.

Financial Schedules Once activation groups are activated, schedules are generated based on contract information, different contract classification options, the terms that are likely to be exercised, and the estimated start dates. This helps to ensure that the current terms and conditions have been correctly entered and to forecast the retained earnings impact during transition to the new lease accounting standards. The financial schedules available include lease liability amortization schedules, non-lease payment schedules, total payment schedules, rent expense, and asset depreciation.


Feature DescriptionPostings Schedule A view that contains information about any transaction between the lessee and lessor.

For every period, there is an option to post interim invoices for payments, accruals, and asset depreciation.

Audit Log A list of all changes that have been made at any level of the contract structure, including who made the change and when it was done. This allows for easy identification of any incorrect reporting.

Event ManagementFeature DescriptionReassessments Supported at the activation group level, reassessments allow users to change which

terms and conditions are likely to be exercised, such as purchase options, termination options, extensions, and expected GRV amounts. This functionality is required to help organizations meet the requirements set out in IFRS 16 and ASC 842.

Lease Modifications Users can add new terms and conditions in the lease components, modify existing terms and conditions, and change the contract rate. This helps to ensure that all required information is recorded for reporting under the new lease accounting standards.

Change Contracts Allows users to edit fields in a contract that do not have a financial impact such as changing the lessor, user notifications, or description.

Asset Casualties Casualty events can be entered for an activation group, which retires selected assets in the associated activation group. Using the asset causality feature to apply a decrease in scope lease modification, streamlines reporting under the new lease accounting standards.

Adjustment Postings View adjustment postings that result from performing a lease modification, reassessment, or casualty. This allows users to ensure that data has been correctly entered before finalization.

Reporting and AnalyticsFeature DescriptionDisclosure Reports A summary page providing the necessary information to prepare the required

quantitative note disclosures under IFRS 16 and ASC 842. Management Dashboards

A comprehensive overview of lease contracts that enable users to quickly understand the various levels of a lease contract. The following analytic charts are available by default: Master lease agreement, contract, lease component, activation group, and unit.

Transaction Reports Also known as reconciliation reports, users can use transaction reports to view a detailed list of all transactions that have been posted in an ERP from Nakisa Lease Administration. Transaction reports can be exported to facilitate the use of the solution in disconnected mode.

Custom Reports Generate reports using Excel Power Pivot or Power BI to access additional insights and perform quantitative analysis such as lease vs buy.


TechnologyFeature DescriptionRole-based Access Roles are set to limit the actions that each user can do. Roles are assigned based on

mapping configured between Nakisa Lease Administration and active directory groups.Data Scoping Data scoping can be applied to limit which contracts a user can see. Workflow Engine Approval workflow logic supports business processes executed for common

operational events. This allows for segregation of duties and responsibilities. Quick Search Available at the top of all pages, search for a master agreement, contract, lease

component, or activation group. Action Centre An overview of open and pending objects, such as the number of open master

agreements, contracts pending approval, or activation groups pending assessment. Alerts Alerts can be configured to notify users of items requiring attention, such as contracts

pending approval or contract termination. Alerts help to reduce the risk of penalties and undue payments.

Cloud Technology Nakisa Lease Administration is sold as a subscription in the cloud. Nakisa Cloud is a single-tentant solution with all customer data isolated, segregated, and encrypted.

Standalone Mode Nakisa Lease Administration is available in disconnected mode to support accelerated solution deployment and adoption. This functionality shortens the timeline from procurement to data collection and lease accounting. Following disconnected deployment, customers retain the option to integrate with their SAP ERP.

Multilingual Use Nakisa Lease Administration in multiple languages including English, French, German, Spanish, Portuguese, Russian, Japanese, and Chinese.

Contact UsPlease visit www.nakisa.com for more information or email [email protected] to arrange a meeting with a member of our team.

Email: [email protected] Tel: +1.514.228.2000www.nakisa.com

Nakisa Lease Administration: A Single Solution for …...Nakisa Lease Administration is a purpose...

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