Homnet Leasing IFRS

Homnet Leasing IFRS module is an industrial expert solution for automation of parallel IFRS reporting in leasing companies of various specialisation and scale of activities. This is a unique IT product accumulating best practice of IFRS reporting automation of the largest leasing companies.

The methodology of parallel accounting is implemented using the double entry principle on a separate chart of accounts. The system is accompanied with detailed documentation and a standard methodology of leasing operations accounting.

The system ensures full recording of all leasing operations in accordance with IAS 17. A peculiarity of the module is that not only regular operations (transfer to leasing, crediting of cash and revenue recognition) but also non-standard events, such as changes of payment schedule, early buy-out, withdrawal, insured events, change of lessee, stoppage of revenue accrual on problematic contracts, etc. have been elaborated in detail.

Beside leasing operations the system also supports standard possibilities � translation of transactions from the RAS, parallel accounting of own fixed assets, deferred expenses and intangible assets.

Additional option "Accounting of Closed Periods Corrections" makes it possible to automatically record in the current IFRS period those changes that were made in local accounting or in payment schedules related to periods for which the IFRS reports have been already published.

Projects for Homnet Leasing IFRS module implementation are as a rule accompanied with creation of a detailed methodology for accounting leasing and other operations according to IFRS performed on the base of standard methodology. This document makes it possible to considerably simplify the procedures of internal and external audits and may serve the basis for corresponding sections of the company's accounting policy. Reports generated with Homnet Leasing IFRS module have many times successfully passed audits including by the "Big Four" companies.

The system supports the possibility of fully-featured input of the lease portfolio balances � both with recording corrections from transfer from Excel in the first reporting period and with recalculation of schedules as of the beginning of the first reporting period and correction of the opening balances.

Homnet Leasing IFRS realization conception

Functionalities

Automatic recording of standard operations under lease contracts

  • accounting of capital investments included into the cost of leased assets
  • recognition of start of a lease term
  • calculation of lease schedules (for the internal rate of return the IRR or XIRR function is used)
  • regular recognition of financial income and accrual of indebtedness under lease schedules
  • recording of incoming leasing payments, repayments and corrections

Recording restructurizations and closing of lease contracts

  • change of schedules (including retroactive change, grace periods, etc.)
  • early buy-outs (full or partial) and buy-outs according to the terms of contracts
  • terminations and withdrawal of leased items (operations of recording withdrawal and delivery to the warehouse may be divided)
  • insured events and their settlement
  • change of the lessee

under various types of events recalculation of the yield rate and leasing schedules for the IFRS is performed automatically

Suspension and restoration of revenue accrual under "problematic contracts"

Accounting of provisions and devaluations based on flexible parametric setting

  • automatic calculations of accounts receivable provisions
  • devaluation of withdrawn machinery

Reporting preparation

  • consolidated reporting on the lease portfolio with breakdown by maturity
  • final financial reporting (statement on financial position, statement of comprehensive income, etc.)
  • standard accounting IFRS reports

Large number of reconciliation reports making it possible to determine possible accounting errors

Additional option "Closed periods corrections" makes it possible to automatically record changes taken place in past (closed) periods with the current date

Advantages

For persons responsible for automation

  • implementation and deployment methodology confirmed by dozens of successful implementations
  • a standard accounting methodology is used during implementation that ensures up-to-datedness of the settlement data and successful passing of internal and external audits

For financial department employees

  • reduction of IFRS reports preparation time
  • minimization of the human factor impact due to formalization of the accounting and reporting preparation methodology
  • minimization of error risks and increasing the reliability of reports generated
  • full-value implementation of analytical accounting

Homnet Leasing IFRS users:

VTB Leasing
MAN Financial Services Caterpillar Financial
BOT Leasing
IVECO Capital
Cisco Capital

For managers

  • improving the reliability of generated reports required for decision making
  • Improving the operational efficiency of obtaining information required for various management decisions
  • possibility to obtain various analytical information both for analysing the company's activities generally and for analysing financial results on each deal

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