IFRS16 blog: Would like to have better solution but worried about continuation of bookings?
The most typical reason for the change is that reporting is taking too much time and is not reliable enough. As many systems are difficult, the usage is also limited, budgeting is not done at all, and reporting is done at the last minute or late.
But as time passes, our customers are facing a new problem: When doing something with solution X for more than three years, changing the system is seen as a risk as continuation of the reporting cannot be guaranteed – or can it?
Of course, when changing a system one can always explain some discontinuation with the change itself. Typical approach has been that contracts start over at a given date and differences are explained by onboarding the new system. It is also possible to re-do all or the most important contract changes during those years – but there is still a difference due to slight differences in mathematics within different solutions.
The latest innovation in this field is Robotic Process Automation – RPA. Some of our largest new customers, changing from a system linked to SAP or similar larger software environments, having thousands of contracts and a lot of contract changes, have solved this challenge by creating Excel tables of all the bookings done from these contracts during the years using RPA technology.
As Fatman is a top-class software house, we can obviously create scripts that generate corresponding contracts including all changes and thus duplicating calculations from the previous system. This ensures 100% continuation of the balance sheet and bookings. And if these contracts change at a later stage, IFRS16 mathematics as such ensure that even when new balance sheet values are calculated with slightly different formulas, it makes no issues. As change entries in liability side and both change entries and thus new balance on the asset side is proportional to ending balance of previous month, one gets logical and continuous bookings.
Contact us to learn more!