Beyond manual calculations: How IFRS 16 software transforms compliance in 2025

As financial reporting standards evolve, so must our approaches to implementing them. IFRS 16, the lease accounting standard that revolutionised how organisations recognise lease assets and liabilities, presents unique compliance challenges that increasingly demand specialised solutions. Is your organisation still relying on spreadsheets and manual calculations? Let’s explore why purpose-built IFRS 16 software has become essential for modern finance teams.

What is IFRS 16 and why is manual compliance becoming obsolete?

Introduced in 2019, IFRS 16 fundamentally changed lease accounting by requiring most leases to appear on the balance sheet. The standard eliminated the distinction between operating and finance leases for lessees, creating a single accounting model where lease liabilities and corresponding right-of-use assets must be recognised.

While spreadsheets might have sufficed during initial implementation, the ongoing complexity of IFRS 16 compliance has exposed significant limitations in manual approaches. As we approach 2025, these challenges are becoming increasingly apparent:

• Complex calculations for lease modifications, reassessments, and impairment tests
• Difficulties maintaining audit trails and version control
• Increased risk of formula errors and inconsistent applications
• Time-intensive data collection and validation processes
• Challenges with producing comprehensive disclosure reports

With each reporting cycle, these manual processes consume more valuable resources while increasing compliance risks. Have you calculated how many hours your team spends on spreadsheet maintenance and error checking?

How IFRS 16 software transforms the compliance process

Purpose-built IFRS 16 software automates the most challenging aspects of lease accounting while providing structure and consistency to compliance efforts. While data entry remains manual—ensuring proper review of contract terms—the complex calculations happen automatically.

The core transformation occurs through several key mechanisms:

Centralised lease repository: A single source of truth for all lease data, eliminating disparate spreadsheets and improving data governance. When lease information changes, all calculations and reports update automatically.

Calculation automation: The software handles complex calculations including present value calculations, interest allocations, lease term reassessments, and modification accounting—all following the precise requirements of the standard.

Audit trail capabilities: Every change is logged with user details and timestamps, creating a comprehensive audit trail that simplifies verification and reduces compliance risk.

Key benefits of implementing IFRS 16 software solutions

Moving from manual spreadsheets to dedicated IFRS 16 software delivers substantial advantages beyond mere compliance:

Time efficiency: Finance teams report saving 60-80% of the time previously spent on lease accounting tasks. This freed capacity can be redirected toward value-adding financial analysis and strategic support.

Error reduction: Automated calculations and validation checks dramatically reduce the risk of formula errors, inconsistent applications, and oversight mistakes that plague spreadsheet-based approaches.

The greatest benefit of our IFRS 16 software implementation wasn’t just compliance—it was giving our finance team back the hours they were wasting on spreadsheet maintenance and reconciliations.

Beyond operational efficiencies, IFRS 16 software enhances financial management through improved visibility and decision support. The real-time access to lease information and impact analysis helps organisations make better-informed decisions about lease renewals, modifications, and capital allocation.

Getting started with IFRS 16 software: Implementation steps for success

Implementing IFRS 16 software requires careful planning and execution. We recommend following these proven steps:

1. Needs assessment: Document your current processes, pain points, and specific reporting requirements
2. Solution selection: Evaluate vendors based on your requirements, integration capabilities, and support services
3. Data preparation: Clean and standardise your lease data before migration
4. Implementation and configuration: Configure the software to match your accounting policies and disclosure requirements
5. Testing and validation: Thoroughly test calculations and reports against your existing methods
6. Training: Ensure all users understand how to use the system effectively
7. Go-live and post-implementation review: Monitor system performance and address any issues

The most successful implementations begin with a clear understanding of your organisation’s specific requirements and a pragmatic approach to data migration. Rather than attempting to perfect historical data, focus on establishing sound processes for ongoing maintenance.

Future-proofing your compliance: IFRS 16 software trends for 2025 and beyond

As we look toward 2025 and beyond, IFRS 16 software solutions are evolving to incorporate new capabilities:

The most forward-thinking solutions are also expanding their integration capabilities, connecting lease accounting data with broader financial systems. This creates a more cohesive financial technology ecosystem that can adapt to evolving regulatory requirements without disruption.

Is your organisation ready to move beyond spreadsheets and embrace the efficiency of purpose-built IFRS 16 software? The transition may seem daunting, but the long-term benefits in terms of time savings, error reduction, and improved financial insights make it a worthy investment for finance teams looking ahead to 2025 and beyond.