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    The IFRS16 precept: the impacts on the lessee

    In order to improve the economic-financial frankness of the financial statement, the IASB (International Accounting Standard Board) has issued the new accounting precept IFRS16-lease: this precept imposes to the lessee to account, without any difference, the operative and financial leasing contracts.

    The IFRS16: the impacts on the lessee

    Specifically, the impact of the operative and financial leasing (managed apart from the financial statement) will be clearly visible in the company financial statement. In detail:

    • Inscription in the Right of Use financial statement asset against the inscription in the financial statement liabilities of the contracted debt for the usage of goods;
    • Registration to profit and loss account, of the interest share and consequent increase of the debt;
    • Registration to the profit and loss account of the amortization asset;
    • Reduction of the debt due to the payments sustained over time.

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    The operative, financial and economic impacts can be considerable within the companies processes, considering that they are potentially inherent to a copious number of properties ”hired/rent” by third parts such as:

    • Commercial and residential properties;
    • Car fleet;
    • Computer equipment (servers, photocopiers, printers. Pcs and so on…);
    • Industrial equipment (forklifts, machineries and so on…).

    Moreover, in strategic terms, the IFRS16 precept imposes reflections on how to have the availability of an asset: purchase or rental?

    The keys to analyze and correctly manage these news are:

    • Do exact process mapping, identify all the responsibilities involved;
    • Take IT tools that allow managing correctly the fundamental contractual dimensions that have an impact on IFRS16;
    • Estimate the impacts and the process and infrastructure modifications.

    In choosing the IT contractual management tools, the fundamental requirements should be:

    • Configurability of the system, in terms of the diverse types of goods/services handled;
    • Interoperability among the diverse departments involved: typically, there is not a solo management point of the contract at the level of company, but there is the competition of several company directions;
    • Adaptability of the system, considering the variability of the contracts over time.

    A perfect tool for the contractual management allows having data and processes coherent at company level, condition necessary to carry out operative and strategic evaluations.

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