How to Automate IFRS 16 Compliance and Save 20+ Hours Monthly on Reporting

What is IFRS 16 and why automation is a game-changer

IFRS 16 has transformed how companies handle lease accounting since its introduction. This accounting standard requires businesses to recognize leases on their balance sheets, giving investors a clearer picture of lease obligations. While that sounds straightforward, anyone who’s wrestled with IFRS 16 reporting knows it can quickly become a maze of complex calculations, data tracking, and disclosure requirements.

The reality is that manual IFRS 16 compliance typically consumes 20-30 hours monthly for finance teams. You’re gathering lease data from multiple departments, calculating right-of-use assets and lease liabilities, tracking modifications, and preparing detailed disclosures—all while trying to maintain accuracy. It’s precisely why automation has become such a game-changer.

Our Frame IFRS 16 Lease Management application transforms this tedious process into a streamlined workflow. Rather than spending days compiling reports across spreadsheets, automation centralizes your lease data and handles the complex calculations instantly. The result? Your team can redirect those 20+ monthly hours toward strategic financial activities instead of drowning in compliance paperwork.

5 common IFRS 16 reporting headaches solved by automation

Managing IFRS 16 compliance manually creates numerous challenges that automation elegantly solves. Let’s look at the top pain points where Frame makes all the difference:

First, data fragmentation and collection typically forces you to hunt down lease information across various departments and systems. Frame centralizes all your lease contracts in one secure location, creating a single source of truth accessible to everyone who needs it—no more chasing colleagues for missing details!

Second, IFRS 16 calculations are notoriously complex. Discount rates, lease term changes, and modification accounting can quickly become overwhelming. Our automation handles these intricate calculations instantly, even managing complicated scenarios like extension options, termination costs, or changes in lease scope that would otherwise require hours of manual work.

Third, preparing disclosure notes for financial statements traditionally involves pulling data from multiple sources and ensuring all figures align. Frame automatically generates your balance sheet notes, P&L notes, and cash flow statements in compliance with IFRS 16, eliminating the risk of transcription errors while saving hours of work.

Fourth, audit preparation becomes significantly easier with automation. Frame maintains a complete history of all lease contracts and modifications with proper documentation, providing auditors with a clear trail and reconciliation reports that dramatically reduce audit queries.

Finally, currency handling across multiple countries creates added complexity for international businesses. Our automation handles multicurrency situations seamlessly, converting and tracking leases across different currencies without requiring manual calculations.

How to choose the right IFRS 16 automation solution for your business

Selecting the perfect IFRS 16 solution requires careful consideration of your specific needs. Start by evaluating your lease portfolio’s complexity—how many leases do you manage? Do you have frequent modifications? Do you operate in multiple currencies? The answers should guide your selection process.

Look for comprehensive calculation capabilities that handle all IFRS 16 scenarios you might encounter. Your solution should manage not just basic leases but also complex situations like duration changes, price adjustments, penalties, impairments, and purchase options. Frame excels here, handling everything from standard contracts to the most complex lease arrangements.

Compatibility with your existing systems is crucial for smooth implementation. The ideal solution should work harmoniously with your current bookkeeping and consolidation systems. Our Frame application offers compatibility without requiring integration work, providing seamless data transfer to your accounting systems.

User-friendliness matters tremendously, as you’ll want all relevant team members to use the system comfortably. Frame is designed for ease of use, allowing anyone in your organization to handle lease management without needing specialized IFRS 16 expertise.

Finally, consider scalability—your business will grow, and your solution should grow with you. The right automation tool should handle anywhere from 10 to 10,000+ lease contracts without performance issues.

Step-by-step implementation guide: Automating your IFRS 16 reporting process

Transitioning to automated IFRS 16 reporting is simpler than you might think. Here’s how we recommend approaching implementation with Frame:

Begin with a thorough lease inventory assessment. Gather your existing lease contracts, including all relevant details like commencement dates, lease terms, payment schedules, and renewal options. This preparation phase ensures you’re ready to input comprehensive data into your automation system.

Next, manually input your lease contract details into Frame. While the data entry requires initial setup, it creates the foundation for all future automation benefits. Our user-friendly interface makes this process straightforward, with clear fields for both standard lease data and IFRS 16-specific information.

After data entry, configure your reporting settings based on your organization’s structure. You’ll customize filters for properties, cost centers, business segments, and legal entities to ensure reports match your company’s specific needs. Frame then automatically calculates all required IFRS 16 figures, including right-of-use assets, lease liabilities, depreciation, and interest costs.

Finally, set up your monthly reporting schedule. Frame will generate all the necessary bookings and disclosures according to your predefined timeline, ready for export to your financial systems. You’ll save countless hours while dramatically improving accuracy and compliance.

Measuring ROI: How companies saved 20+ hours monthly with IFRS 16 automation

The business impact of automating IFRS 16 reporting extends far beyond mere compliance. Companies using Frame have experienced remarkable efficiency gains worth highlighting.

A European retail chain with 500+ leases across multiple countries reduced their monthly IFRS 16 reporting time from 40 hours to just 8 hours—an 80% time savings. Their finance team now focuses on strategic analysis rather than tedious calculations, while enjoying error-free reporting and smoother audits.

Another publicly listed manufacturing company eliminated the need for external consultants previously hired to manage complex lease modifications. By implementing Frame, they’ve saved approximately €60,000 annually while improving reporting accuracy. Their finance team particularly appreciates how easily they can model different lease scenarios before finalizing decisions.

Beyond time and cost savings, companies report significant reductions in audit-related stress. With Frame’s clear reconciliation reports and full audit trails, what once took days of explaining calculations to auditors now requires minimal effort. One financial controller described their most recent audit as “remarkably uneventful” compared to previous years.

The bottom line is clear: automating IFRS 16 compliance with our Frame solution delivers consistent time savings of 20+ hours monthly for most companies while enhancing accuracy and reducing compliance risks. That’s time your finance team can redirect toward activities that drive business growth rather than just ticking compliance boxes.