Coming up to Year End and need to prepare? We've got you sorted! In this article we're giving you some tips on:
- How to review the contractual changes in your Organisation over the year to determine where updates are required
- How to update your Agreement Events to reflect the relevant changes that occurred during the year
- How to check that your Agreements are reporting as expected
- How to review the calculations and values on your Reports for accuracy
As well as a few extras that go without saying, but we've added them in for good measure!
Video Tutorial: End of Financial Year Tips in Nomos One
Check out this video guide with our End of Year Tips:
Start early!
We know that you'll probably be pretty familiar with the requirements of lease accounting under the IFRS 16 standard by now, and that it can be complex. That's why we're giving you this reminder to start early.
By starting early, you'll have time to make any required updates, correct any data entry issues and validate the changes you make by checking the output in the Reports.
If you haven't already, we recommend that going forward you start to review your Agreements and update them on a more regular basis so that you're not left with lots to do in the final months.
Review your lease portfolio
Reviewing is the essential first step to preparing your portfolio for year end reporting. It enables you to identify:
- If any Agreements have been added to your portfolio that have not been accounted for yet
- What updates are required for your Agreements to reflect scheduled and unscheduled changes that may have occurred in the past financial year
- Any possible data entry errors made by your Team - IFRS 16 is complex, so human error does happen. Where errors have been made, and you're not sure how to fix them, feel free to contact our Support Team at support@nomosone.com, who are always happy to help!
Check all Events are up to date
Checking all your Events are up to date is a pivotal part of your review. We recommend breaking this down by:
- Checking the status of your Events by reviewing the Time frame of them on the Upcoming Events Report.
- Ensuring all Overdue Events are complete. This is essential for ensuring your IFRS 16 Reports pull the most up to date information about your Agreement.
- Collating a list of Variations that need to be actioned on your Agreements and reviewing here whether they can be actioned by you, or whether our Support Team needs to lend a helping hand.
Extending or decreasing a lease term's dates? Ensure you update this correctly by following our updated best practice guidance on Extending and Decreasing the lengths of your lease terms.
Confirm your Agreement is reporting
Data entry errors and failure to include IFRS Settings Changes, such as to the Expected Renewals can lead to your Agreements not reporting or reporting incorrectly. We don't want you to miss out on reporting any Agreements so we have compiled some handy tips below:
- Check that all Renewals you reasonably expect to exercise are included in the IFRS calculations from:
- The Initial IFRS Settings if they were reasonably expected to be exercised from your Agreement's Commencement date; or
- The IFRS Settings Changes if they were reasonably expected to be exercised from a date after your Agreement's Commencement date
It is essential that Expected Renewals (and other IFRS Settings) are included in calculations using the right functionality. If a Renewal that is only added to your calculations six months after an Agreement's Commencement date is marked on the Initial IFRS Settings, it'll remeausre from the Commencement date.
Make sure you use the IFRS Settings Change Questionnaire on a completed Event dated the date of the impact, and you'll see that remeasurement occurring from that date forwards.
- Review the Reporting Logs on your generated reports to check there's no data entry or processing errors preventing your Agreements from being included in the reports
Review your calculations
Validating calculations is always an important step in your year end reporting. We encourage you to review your calculations to ensure all the updates processed on your Agreements were done correctly.
- Use the Journals when you make a change to an Agreement. Filter your Journals for a detailed account of financial transactions on an Agreement.
- Require an auditor level of granularity? Use our Daily Calculation Report to identify daily transactions.
Notice any differences? Investigate any changes using these tips.
Nomos One does not provide or purport to provide any accounting, financial, tax, legal or any professional advice, nor does Nomos One purport to offer a financial product or service. Nomos One is not responsible or liable for any claim, loss, damage, costs or expenses resulting from your use of or reliance on these resource materials. It is your responsibility to obtain accounting, financial, legal and taxation advice to ensure your use of the Nomos One system meets your individual requirements.