About the Application

Nakisa Lease Administration is a holistic lease management, accounting, and reporting solution designed to support regulatory compliance with IFRS 16 and ASC 842, as well as GASB 87. As a comprehensive lease accounting solution, Nakisa Lease Administration allows organizations to centralize global leasing data, gain insight into lease liabilities and commitments, and streamline lease accounting operations.

The solution offers functionality that assists customers in their efforts to be compliant with the following IASB, FASB, and GASB requirements:

  • Lease inception (asset capitalization and lease obligation, including base rent, extensions, initial direct costs, incentives, prepaid, index, termination option, and purchase option)
  • Lease events:
    • Asset casualties
    • Reassessments (selection of which terms and conditions are likely to be exercised, extensions, terminations, and early buyout)
    • Lease modifications (rent modification, new terms and conditions, rate modification, scope increases and decreases)
    • Asset impairment
    • Intercompany asset transfer
  • Multi-GAAP: Financial schedules per accounting standard, and per classification type (finance, operating, short term, low value, service)

    Note: Nakisa Lease Administration supports ASC 842 Operating leases with the following limitation in multi-GAAP: The application does not support postings to different asset acquisition GL accounts when two accounting standards in the same lease have finance and operating lease classifications.

    • Account assignment in SAP should be set up in order to book asset capitalization to separate GL accounts in order to be reported under different balance sheet positions.
  • Non-lease components
  • Support of Parallel ledger accounting in SAP
  • Support of New Asset Accounting in SAP
  • Support of parallel connections to SAP
  • Connected and disconnected modes (with respect to SAP)
  • Full retrospective transition accounting
  • Proposed approach for modified retrospective transition accounting

Financial users can collect lease contract information, review and approve financial schedules, onboard leased assets and operate the lease (i.e., track asset status and trigger posting executions).

Furthermore, business roles segregation, classification and approval workflow logic, alerts and notifications, as well as reporting and dashboard capabilities support the business processes executed for common operational events.

The following table lists the accounting features addressed in Nakisa Lease Administration.

Accounting Feature

Supported Nakisa Lease Administration Feature

Inception recognition

PVMLP (Present Value Minimum Lease Payment) computation

Initial Direct Cost

Lease incentives (in cash or free rent)

Purchase option

Renewal term

Prepayment (lease payments paid before commencement date)

Index

Guaranteed residual value

Contract rate (implicit rate)

IBR if contract rate is not available

Non-lease component

Activation group: Capitalizing assets in different batches within the same contract when they are received

Bulk assets

Termination option (likely to exercise or not)

Lease determination questionnaire to identify the type of leases

 

Fixed lease contracts

Low value leases

Short term leases

Fix & variable leases

Non-lease contract

Service contracts

Type of payments

 

 

In advance

In arrears

Amount frequency: Daily, Monthly, Yearly, One Time

Payment frequency: Bi-Monthly, Monthly, One Time, Quarterly, Semi-Annually, Yearly

360 convention

Subsequent measurements

Determination of depreciation term (shorter of useful life or lease term, unless there is a purchase option or transfer of ownership)

Straight-line depreciation

ASC842 operating depreciation

Effective interest method, lease liability amortization

Non-lease periodic recognition

Accrual and payments

Reclassification of lease liability (short-term/long-term)

Lease modification

 

Increase of scope of ROU asset (such as adding a new lease component for additional new equipment to the lease)

Decrease of ROU (reduction in lease, such as returning few assets from the original batch causing a revised payment plan)

New terms and conditions (change contract rate, payment, lease term, etc.)

Lease reassessment

 

Increase of scope of ROU asset (e.g., exercise extension term option that was not included, i.e., was not reasonably certain to exercise at inception)

Decrease of ROU (e.g., not exercising the extension term that was included in the initial recognition)

Index change

Casualty

Change of estimated GRV

Other lease events

Indexation

Casualty

Asset impairment

Intercompany asset transfer

Note: A system administrator configures the application to accommodate the specific needs of your company. The information provided in this guide may be different from the current application if it is customized.

Nakisa Lease Administration 2022.R2-SP © 2023

 

 

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