Major Deliverables of TRIRIGA 10.5.3

IBM TRIRIGA 10.5.3 is in production and streamlines your FASB/IASB compliance.

Let’s review the six major enhancements for advanced lease accounting.

  1. Period end close capabilities
  2. Enhanced segregation of duties between lease administrator and lease accountant
  3. Streamlined modification processing
  4. Disclosure requirements templates (quantitative metrics)
  5. Journal Entry Configuration Framework
  6. Simplified ERP Integration (Data Transfer Object)

Major Deliverables of IBM TRIRIGA 10.5.3

1. Period end close capabilities

TRIRIGA 10.5.3 delivers “Lease Accounting Period Close” which ensures that no additional journal entries can be posted for that closed period. This basically means that once all the journal entries have been processed for a particular period, this functionality prevents you from adding additional Journal entries to ensure your data and reporting are accurate.

Advantages:

  • Ensures process consistency
  • Enables analysis and reconciliation
  • Improves data accuracy

2. Enhanced segregation of duties

With IBM TRIRIGA 10.5.3, the roles and responsibilities of Lease Accountant and Lease Administrator have been clearly delineated. While both the roles are now mandatory contacts for all leases, a lease administrator can only create, revise, and terminate leases but cannot edit financial data. It is the Lease accountant who has exclusive access rights to the accounting and financial data and gets to review, analyze and activate leases, review and approve changes made by the lease administrator, and process fiscal line items for journal entries.

Advantages:

  • Clear definition of roles and responsibilities
  • Improves control and streamlines process and workflow
  • Improves data accuracy

3. Streamlined modification processing

A revised process for recording lease modifications has been introduced in this version which supports FASB/IFRS compliance and creates a single process flow for all modifications.

Modifications include “Data Revise” which can be used both by the lease administrator and accountant to modify non-accounting information.  The Lease Administrator can use the “Amendment” action to exercise an option.   The Lease Accountant can use the “Change in Assessment” to update leases if he is ‘reasonably certain’ of executing a Renewal, Termination or Purchase option in the future. “Change in Contractual Factors” option is used by the Lease Accountant to re-measure the lease.

You can also adopt the new Accounting Standard using the ‘Review Lease Assumptions’ option, either in bulk or for selected leases. As of the look-back period, TRIRIGA will calculate the NPV of Rent and revalue the Lease Liability and ROU Asset.

Advantages:

  • Supports FASB/IFRS compliance
  • Streamlines process and workflow
  • Improves data accuracy

4.  Disclosure requirements templates (quantitative metrics)

IBM TRIRIGA 10.5.3 comes pre-loaded with a variety of OOTB report templates which support FASB/IASB compliance. Some of them include:

  • Right-of use asset, finance and operating leases
  • Lease liabilities, finance and operating leases
  • Finance lease expense (amortization and interest)
  • Operating lease expense
  • Cash flow – finance lease (principal and interest), operating leases, – short term leases, variable payments
  • Initial recording of lease at commencement
  • Future Rent Obligations
  • Weighted Average Lease Term/Discount Rate

Advantages:

  • Supports FASB/IFRS compliance
  • Enables analysis and reconciliation

5.  Journal Entry Configuration Framework

With capabilities to generate Journal Entries for ASC 840 and ASC 842 under US-GAAP, as well as for IAS 17 and IFRS 16, IBM TRIRIGA 10.5.3 practically transforms the Real Estate Manager module into a sub-ledger system for Real Estate and Asset Lease Accounting.

Advantages:

  • Streamlines process and workflow
  • Improves data accuracy
  • Simplifies ERP integration

6. Simplified ERP Integration (Data Transfer Object)

TRIRIGA 10.5.3 simplifies the process of transferring the lease accounting data into your ERP system by creating a Data Transfer Object (DTO) file that loads into the ERP General Ledger. TRIRIGA allows you to configure up to 30 additional fields to transfer the data to your ERP General Ledger system.

Advantages:

  • Streamlines process and workflow
  • Improves data accuracy
  • Simplifies ERP integration

With multiple user-driven features, IBM TRIRIGA 10.5.3 will help streamline your compliance with both the FASB (GAAP) and the IASB (IFRS 16) guidelines.  To learn more, register for ValuD’s IBM TRIRIGA FASB webcast series with our expert lease accounting team.

Click here to view FASB Infographic

References: IBM TRIRIGA 10.5.3 Lease Accounting Implementation Guide

Unsung heroes of ValuD

CEOs know that their company’s most valuable assets are their people. At ValuD, our team and company mantra is “do whatever it takes” to make the client project successful. In this post, the first in an upcoming ValuD series, we spotlight examples of our unsung heroes, who play a pivotal role in client satisfaction.

Don’t let his project management title fool you as this ValuDian has never hesitated to jump into any task. At ValuD he has donned multiple hats including business analyst, client coordinator and resource manager, to get the job done.

Working for clients can be a delicate job. Tapping into his IBM TRIRIGA expertise, this ValuDian has helped both his team and his clients navigate their way out of complex situations. Every client is unique so the ability to communicate and educate the client on the product capabilities, particularly out-of-the-box functionalities, is invaluable.  Our ValuDian is gifted and guides his clients so they can align their business processes to TRIRIGA’s capabilities and streamline their business requirements process.  This activity sets the foundation for a successful project.

One example is when our ValuDian took a different approach for a Lease Accounting project for a large North American auto parts distributor.  By using only five leases in the Discovery phase of the project, the ValuD team helped the client map their current process to TRIRIGA capabilities.  Through this approach, the team quickly demonstrated how TRIRIGA generates payment line items, how suppliers are linked, and how payments are processed from TRIRIGA. This discovery helped the client easily understand how to align their business requirements and their TRIRIGA configuration needs.

Sometimes project managers have to deal with multiple groups within the client’s organization and adopt the role of moderator. In one particular Lease Accounting client engagement, our ValuDian navigated through a complete change of the client’s project team mid-stream. Our ValuDian stepped up to adapt and adjust implementation processes to close the gap. Put best by this leader, “We had to play the role of translator between the two groups using different terminology and unaligned goals. We made the transition seamless.”  Needless to say, another ValuD happy and repeat customer.

Long running projects can present multiple issues – staff changes (both from your’s and the client’s team), requirement updates, and cost impacts. A good project manager has to continually motivate and mentor his team members and ensure that the client’s needs are taken care of at every stage of the project. In a four year long lease accounting project for a global accounting firm, our ValuDian led the team and ensured new team member project ramp up by creating a “Deployment document.” The document detailed the various processes and procedures for the stages of the SDLC. As a result, new team members adapted quickly and easily, with no impact to the client timeline.

In less than a decade, ValuD has emerged as the leader in TRIRIGA implementations. The credit for such a remarkable rise belongs to our team members who do not hesitate to take ownership to deliver quality solutions for our clients, setting us apart in the industry. As we continue to rapidly grow and expand our presence, we salute these unsung heroes who have made ValuD what it is today.

Are you Ready for FASB compliance? – the clock is ticking!

It’s been more than a year since FASB and IASB released their version of the new leasing standards. Our earlier blogs have detailed the basic steps that you need to take to get FASB compliant  and the various challenges and costs associated with FASB implementation . IBM predicts that the newly recognized leases will add up to $1 billion in liabilities in the balance sheets of mid-to large-sized companies. With the 2019 deadline fast approaching, companies have begun assessing the impact of the new leasing standard but adoption is still low. A joint survey by PWC and CBRE has found that only 1% of the respondents had completed the implementation while 23% had not even started work on it! The majority of respondents (52%) were still assessing the impact of the leasing standard.  Such alarming data makes you wonder whether it’s time to take stock of how well-placed you are with respect to your compliance levels.

FASB Compliance considerations:
Project Planning: Let’s start with the most obvious. Have you

  • Created a lease implementation project roadmap and identified a project sponsor?
  • Budgeted and documented the implementation costs and acquired the necessary approvals?
  • Created a cross-functional (accounting, IT, sales, HR, legal etc) team and identified roles and responsibilities for each of the team members?
  • Documented key deadlines and project milestones and ensured achievement of each of these milestones?

Data Collection: As mentioned in this blog, lease data collection needs to be comprehensive. You will need to collect all essential data related to every single lease in your portfolio. Have you

  • Collected data from various sources (spreadsheets, paper files, ERP systems, standalone lease accounting solutions and the like) and classified all lease data?
  • Performed process improvements to identify gaps (systems, resources, data and process) in the lease portfolio?
  • Consolidated and documented the lease data in a single location?

Accounting: The standard requires companies to provide three years of income statements and two years of balance sheet comparables. Most of the off-balance sheet leases need to be represented as assets and liabilities on the balance sheet depending upon the right-of-use principle. Recognizing a right-of-use asset and a lease liability for each of your leases will not only impact your balance sheet (increased liabilities) but also some of your financial ratios like return on assets, return on capital employed, asset turnover, quick ratios and net worth. Have you

  • Reconciled inconsistencies (due to usage of different templates by various lessors) between leases?
  • Recognized a right-of-use asset and a lease liability for each of your leases in your balance sheet?
  • Do you have an audit trail in place to track changes, if any, and/or for discrepancies?

IT: Upgrading the IT infrastructure of the organization will considerably streamline the implementation process. Have you

  • Ensured that your pre-existing lease accounting software, if applicable, is compliant or upgraded it to be compliant with the new FASB leasing standard?
  • Evaluated and selected the right lease accounting solution for your organization if no lease accounting solution exists?
  • Tested the new solution for completeness and accuracy?

HR and Training: Any new standard comes with its fair share of challenges and the FASB leasing standard is no exception. You will not only require additional resources and staff for the implementation but also will need to provide them with significant training – especially in areas such as lease negotiations, renewals and operating the lease accounting solution. Have you

  • Assigned enough resources for the implementation?
  • Trained the resources on the leasing solution?
  • Educated the sales and marketing team, as well as other related personnel involved, on leasing contracts adopting the leasing standard guidelines?
  • Communicated the impact of the leasing standard to all the stakeholders of the organization?

How IBM TRIRIGA can help
Industry’s leading IWMS solution, IBM TRIRIGA can help you achieve FASB compliance in the following ways:

  • Lease abstraction
  • Scenario analysis
  • Identification of under-performing and/or under-utilized facilities, assets, processes and resources
  • Balance sheet and Income Statement analysis for lease versus buy decisions
  • Asset condition analysis
  • ROI assessment for new facilities to prioritize investment decisions

And much more to get you ready for FASB/IASB compliance as detailed in this blog.

The clock is ticking and the process is complex.  Are you ready to face FASB full force? With multiple FASB reference clients, the ValuD expert team has the experience to plan and implement your FASB solution. To learn more about TRIRIGA 10.5.3, register for our August 16 webcast.

Stop the Spreadsheet Madness – Use Technology to Manage your Facilities

To remain competitive, companies must embrace technology to adapt to dynamic market demands. Even though real estate is the second largest expense for most companies (as per a survey conducted by IBM in 2014), adoption has been low. In fact, multiple surveys have found that paper files, spreadsheets, and forms dominate facilities management in most organizations.

In this post, we highlight why spreadsheets or forms are not sufficient to manage your facilities effectively.  There is a better approach: implement a dedicated IWMS solution as your one-stop solution to achieve your facility optimization goals.

The challenges of spreadsheets and forms:

  1. Data inaccuracy: Let’s face it. Even if you are being extremely careful, manual data entry errors, data duplication, and inaccurate formulas are a reality in spreadsheets. And it gets more complicated if multiple people are involved in the data entry or data management efforts.
  2. Lack of data integrity and centralization: As the business grows and spreads across multiple geographic locations, data integrity becomes an issue with data scattered among different folders, computers and locations. The risk of fraud increases due to inadequate internal controls and lack of an audit trail.

    Departments manage data differently. For instance, the leasing department handles lease data across locations while the maintenance team manages building condition. If say, a maintenance activity needs to be scheduled for a particular leased facility, it would require both departments to collaborate. Without a centralized source of data, effort is wasted, data integrity is questionable, and information sharing is limited.

  3. Reporting and analysis: Spreadsheets offer limited reporting. An IWMS solution like IBM TRIRIGA on the other hand, offers OOTB reports. Designing what-if scenarios, identifying under-performing and/or under-utilized facilities, conducting financial statement analysis for lease versus buy decisions – the kind of analytics you need to make informed decisions are well beyond the capabilities of spreadsheets.

How can an IWMS solution help
A comprehensive IWMS solution like IBM TRIRIGA can

  1. Provide a single point solution for all facility related processes and streamline existing disparate processes such as operations, asset and lease management, space management, move management, strategic planning and reporting
  2. Optimize space utilization by providing better visibility over your space portfolio and reduce churn rates.
  3. Increase productivity by providing ready access to up-to-date information on asset condition and shared workspaces, enabling better space usage.
  4. Identify, consolidate and eliminate vacant and underutilized facilities with the help of pre-built facilities management analytics, reducing overall occupancy costs.
  5. Perform scenario analysis by comparing strategic facility plans against business objectives and existing facilities to arrive at lease versus buy decisions and determine best possible space planning scenarios.
  6. Provide a single, automated, centralized system for move requests, approvals, tracking, scheduling and service provider integration and can also capture and allocate space usage chargebacks on move execution.
  7. Increase the effectiveness of flexible workforce and minimize conflicts in common space usage.
  8. Deliver comprehensive reporting capabilities to allow sharing of information across the organization and other stakeholders improving customer service and cutting costs.
  9. Ensure regulatory compliance

Unlike spreadsheets, IWMS solutions like IBM TRIRIGA can optimize your facilities and increase overall productivity and efficiency of your organization, without compromising data integrity. With multiple implementations, ValuD’s team of IBM TRIRIGA experts can guide you through every step of the implementation process for your organization. Contact us at sales@valudconsulting.com to implement IBM TRIRIGA and take advantage of the latest technology.