PwC’s Lease Fix

Ease the Lease

Overview

IFRS 16 and Ind AS 116, the new standards, will affect:

  • Balance sheet and balance sheet related ratios
  • Income statement
  • EBIT and EBITDA
  • Cash flow statements

All companies will need to assess the extent of the standards’ impacts so that they can address the wider implications. Areas of focus may include: the effect of the standards on financial results, the costs of implementation and any proposed changes to business practices.

Thus, maintaining lease accounts under these regulations would post a significant challenge.

PwC’s Lease Fix is a solution that helps identify, collect, analyse and report data for better compliance and control on lease agreements.

It combines several key features, enabling companies to address data challenges, quantify lease rentals, and automate calculations while also managing the technical requirements of the new lease accounting standards.

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Benefits of PwC’s Lease Fix

Enhanced controls

Lease Fix employs a range of technologies to boost performance across specific business functions. Further, it will have robust information technology general controls to keep maintain robust IT security.

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Accelerated extraction of lease terms

The advanced technologies automate the process of extracting lease terms and clauses, thus providing accelerated extraction and saving time.

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Automated calculations

The proprietary calculation engine quantifies the impact of these new standards including the transition periods. The calculations are automated to increase efficiency and reduce human error.

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Technical expertise

PwC’s approach involves forming an iterative feedback loop by combining advanced technology and the firm’s in-depth accounting experience.

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Analytical reporting

It doesn’t stop here, through integration with ERP, the output can be directly posted into the general ledger.

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Contract governance

The tool is designed to support various forms of reporting, spanning accounting, disclosures, and business intelligence which can generate analytical insights for your management, and hence can add great value in the entire process; while ensuring maximum security. It also takes care of accounting for asset retirement obligations.

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Solution capabilities

Input: Allows the user to upload a scanned contract in individual or batch mode

Extraction: Extracts text from the scanned contracts using advanced optical character recognition (OCR) technology

Analysis: Applies a natural language processing algorithm to extract relevant financial or contractual obligations

Population: Auto-populates different lease input data fields based on analysis outcome

Master data sync: Master information like lessor master can be synced with ERP. Relevant information from the chart of accounts can be configured.

General ledger (GL) posting: The tool can be configured to make GL posting at the time of lease capitalisation and subsequent monthly depreciation and other entries.

Lessor payment: The tool can be configured to create a payment voucher in ERP as per the payment terms and subsequent payment confirmation.

PwC’s Lease Fix will permit effective and efficient IT governance, which will help clients in maintaining IT General Controls (ITGC).

  1. Access controls
  2. Robust password security
  3. Maker-checker controls enabling segregation of duties
  4. Audit trails
  5. Change management
  6. Restricted access to super users/administrators.

Accounting: It provides monthly journal report and lease summary report.

Disclosures: It eases preparation of financial statement disclosures and group reporting packs.

Business intelligence: It provides data for lease analytics and payment schedule.

Built using sturdy platforms

Responsive user interface
Business component layer
Relational database
Document management
Analytical reporting

For more details on the solution, please write to: leasefix@in.pwc.comproducts.india@in.pwc.com

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