Product launch and rebranding
We are excited to announce that Nakisa Lease Administration has been rebranded as the Nakisa Lease Accounting Suite, a strategic evolution that reflects its enhanced functionality, expanded capabilities, and alignment with Nakisa’s vision for a unified solution portfolio.
As part of this initiative, we’ve introduced a refreshed product branding that resonates with the software’s elevated capabilities. To streamline accessibility, we’ve also added a direct link to the Nakisa Product Center in the main menu, providing users with seamless navigation across Nakisa’s integrated suite of solutions. This enhancement supports quick and efficient collaboration between products and portfolios, reinforcing our one-branch strategy.
Lease abstraction, data input, and lease management
In the June and August 2024 releases, we introduced significant enhancements to lease abstraction, data input, and lease management functionality, all aimed at streamlining how lease data is captured and managed. These updates optimize workflows, enhance accuracy, and provide a seamless experience for contract administrators and accountants, empowering them to manage and input lease data with greater efficiency and precision.
Optional asset class selection (lessee accounting)
Previously, asset class selection was mandatory for all lease components, regardless of lease type. This requirement created inefficiencies, especially for lease types that do not require right-of-use (ROU) asset capitalization, such as low-value, short-term, and non-lease service contracts. Users had to select an asset class even when it was irrelevant, leading to unnecessary data entry and a higher likelihood potential for errors.
To address this, we made asset class selection optional for specific lease types, including low-value, short-term, and non-lease service contracts. Administrators and accountants can now save or submit a lease component without selecting an asset class for leases in these categories. This enhancement simplifies the lease component creation process by eliminating unnecessary steps where asset class selection is nonessential, ultimately improving workflow efficiency and reducing the risk of errors.
Editable base and reference indexation rates
This update introduces editable base and reference indexation rates, delivering key advantages for both contract administrators and accountants.
For contract administrators, it ensures greater precision by allowing adjustments to indexation rates for each payment term. This capability supports financial continuity and consistency in schedules post-migration. The addition of an option for US GAAP treatment further enhances flexibility in managing financial reporting from the lease inception.
Accountants benefit from the ability to correct base and reference rates to ensure accurate indexation amounts in financial reports and align migrated leases with legacy systems for data reliability. This flexibility enhances compliance with accounting standards while preserving financial reporting integrity.
When activating the lease component, users are automatically placed in the Activation Group (AG). In the Accounting tab, users can define the CPI type by selecting either “local” or “global”. Finally, users must specify the GAAP Indexation Treatment Type by selecting the appropriate option from the drop-down menu.
Within the Terms and Conditions tab, users can update payment terms by exercising and indexing them. To modify the base or reference indexation rate, users simply click the Edit icon and adjust the indexation base and reference rates along with their dates, and finally submit the updated term using the dialogue box.
The selected GAAP Indexation Treatment Type, set as Standard, highlights the impact of indexation amounts at inception, visible under the Index Non-Lease Payment field.
When changes are in bulk, users can leverage the mass import job to update multiple field values across various lease contracts (MLA, Contract, LCs, etc.). Using the Excel template within the Activation Group (AG), users the user can modify the current index level and GAAP indexation treatment type via the mass import feature.
In the same Excel template, users can navigate to the AG T&C tab to input or update base and reference rates for multiple activation groups simultaneously, streamlining bulk adjustments effectively.
Ability to update the Incremental Borrowing Rate (IBR)
The capability to override the IBR allows contract administrators and accountants to override system-generated Incremental Borrowing Rate (IBR) at the Activation Group (AG) level, ensuring financial continuity during lease migrations. By enabling a one-time adjustment to retain historical rates from previous systems, this feature aligns migrated leases with legacy financial data, maintaining consistency in financial schedules. Accountants can leverage this capability to calculate discounted lease values accurately, reflecting the original lease terms, preserving the integrity of financial reports post-migration. This capability ensures a seamless transition to the new system while upholding the accuracy and integrity of financial reports.
Within the Financial Organization Structure (FOS), users can configure incremental borrowing rates (IBR) based on lease term length, ensuring that the correct rate is automatically applied depending on the lease term specified at the Lease Component level.
The option to override the IBR is available in the Activation Group’s Accounting tab. By selecting the checkbox, the Override Inception IBR field becomes editable, allowing users to input a value that suits the specific scenario. Please note that this IBR override feature is only available at inception, when the contract is in the Define status.
The impact of the overridden rate can also be observed in the highlighted all-columns of the schedule, where the adjusted IBR is reflected in the financial calculations.
For the mass job, users can utilize the mass export Excel template and select the IBR column as TRUE. They can then input a new value under the Override Incremental Borrowing Rate column.
Introduction or override Carry-Over Balances (COB) through mass imports
The introduction of Carry-Over Balances (COB) fields in the mass import Excel template addresses a significant challenge for accountants, particularly when managing split activation groups with differing COBs across lease components. Prior to this, accountants had to manually update COBs for each lease contract, a process that was both time-consuming and error-prone, especially when dealing with large portfolios. With this new solution, COB fields are available in the Excel template for mass imports, enabling accountants to update or override COBs for multiple leases simultaneously. This significantly streamlines the process, reducing the effort required and allowing accountants to focus on more tasks. By consolidating updates, accountants can work more efficiently, maintain better control over financial data, and ensure a smoother review process, all of which contribute to more accurate and consistent financial management.
Users can enter the Carry-Over Balances (COB) at the Activation Group level for individual lease contracts, enabling efficient and accurate management of financial data across multiple leases.
In the Classification tab of this Excel template, two rows are provided for each activation group to accommodate both IFRS 16 and US GAAP balances. The first row allows users to input or override the Carry-Over Balances (COB) for IFRS 16, while the second row is designated for the US GAAP balances, ensuring proper alignment with accounting standards for both frameworks in parallel.
In the same Excel tab, users can input the Impairment Reserve Balances for IFRS 16. For US GAAP, users can select either TRUE or FALSE for straight-line depreciation (highlighted in yellow).
Once the import job is completed, users can view the impact of Carry-Over Balances in All Column Schedules.
Payments after right-of-use (ROU) end date
This enhancement allows users to add and manage payments that extend beyond the right-of-use (ROU) end date. This addresses the previous limitation where such payments were not reflected in financial schedules. In scenarios where outstanding payments continued after the ROU period. This update enables users to generate schedules that include these payments, ensuring the accurate calculation of liabilities up to the final period date.
After creating a Master Lease Agreements (MLA) and Contract, users can define the right-of-use (ROU) start and end date in the Lease Component definition page.
In the Lease Component’s Terms and Conditions tab, users can define payment terms that extend beyond the ROU end date. For instance, if the ROU end date is set to 30-06-2023, but the payment end date is extended to 31-12-2023, this payment term will span 6 months beyond the ROU end date.
The yellow warning sign indicates that the payment is outside the ROU range. This sign serves as a reminder that such payments are intentionally set outside the ROU period. In this example, we've deliberately configured it this way, so you can disregard the warning, proceed with generating the schedule, and activate the activation group as planned.
The schedules have been generated, and payments are now reflected up to 31-12-2023. The liability concludes on the payment end date (31-12-2023), rather than the ROU end date (30-06-2023), ensuring accurate financial tracking beyond the ROU period.
In these schedules, the asset’s Net Book Value (NBV) reaches zero on 06-30-2023, fully aligning with the inputs defined on the Lease Component definition page. This ensures the accurate representation of asset depreciation in relation to the defined lease parameters.
Financial reporting and compliance
In the June and August 2024 releases, we introduced key enhancements to financial reporting and compliance, designed to help users streamline their financial processes while ensuring accurate reporting. These updates improve visibility, support timely reporting, and ensure compliance with accounting standards. As a result, contract administrators and accountants can now manage lease data more effectively, reducing errors and increasing overall efficiency.
Consolidated financial schedules
The introduction of Consolidated Financial Schedules (CFS) in Nakisa Lease Accounting helps both contract administrators and accountants streamline their workflows. Contract administrators no longer need to access and download individual schedules for each lease contract. Instead, they can generate a single report that consolidates all columns at the unit level across multiple contracts, saving time and improving data accuracy. For accountants, CFS provides a consolidated view of all schedules in one place, simplifying financial reconciliations and enhancing the efficiency of financial reporting and preparation.
Cutover date implementation (lessee accounting)
In Nakisa Lease Accounting (NLA), all postings, such as journals, accruals, and depreciation, are only posted to SAP or externally if the posting date is beyond the cutover date. Currently, cutover dates are configurable only at the ERP level, which limits the ability to manage posting restrictions across different companies and classifications. The proposed enhancement will extend the cutover date functionality in NLA to include configurations at both the company and classification levels, offering more flexibility in managing postings.
Financial reports
Nakisa Lease Accounting now provides default access to financial reports, eliminating the need for users to enable them from the Financial Organization Structure (FOS). These reports are now available out of the box, streamlining the process and ensuring immediate access to key financial and contract management information.
For contract administrators, the Income Statement Report highlights lease expenses, and their cost impact, while the Balance Sheet Report offers a comprehensive overview of lease-related assets and liabilities. The Cash Flow Report details lease-related cash flows, supporting financial obligation management.
For accountants, these reports help assess operational efficiency, financial health, and lease payment metrics. The Income Statement supports performance evaluation, the Balance Sheet offers insights into financial health, and the Cash Flow Report provides detailed analysis of lease payments and metrics.
For contract managers, these reports enable a deeper understanding of financial performance, facilitate lease portfolio assessment, and enable effective cash flow monitoring, supporting strategic financial planning.
Data quality and integration
The June and August 2024 releases introduce key enhancements in data quality and integration, offering tools that enhance data accuracy and ensure seamless connectivity across systems. With these updates, users can now better manage and synchronize data, resulting in improved consistency and reliability across all reporting and operational processes.
Asset data report per unit
To support a smooth transition to Nakisa Lease Accounting with FI-GL integration, the Asset Data Report per Unit offers a valuable solution for accountants and contract administrators. This report provides detailed unit-level asset data, ensuring a smooth transition while supporting effective lease contract management and accurate financial reporting. By accessing this granular unit-level information, users can make informed decisions, enhancing operational efficiency and ensuring consistent asset data.
File storage
During migration to Nakisa Lease Accounting, historical schedules are not migrated, which can make generating reports for periods before the cutover date challenging. To address this, users can generate disclosure reports for the current and previous fiscal years, upload them to Nakisa's File Storage, and access these reports easily. Each file is stored with timestamps and user details, ensuring convenient and secure future reference.
Lease migration and document management
Migration flag filtering: The migration flag streamlines the identification and management of migrated leases, enabling batch operations, import/export, and reporting. This feature enhances productivity by quickly filtering migrated leases, ensuring accurate data handling and reducing errors in lease management and reporting processes.
Flexible file upload: Contract administrators can now upload documents in various formats (e.g., PDFs, Word, Excel) without the need for file conversion or compression. This feature displays metadata such as uploader details and timestamps across entities, enhancing document tracking and accountability. Additionally, API tools support bulk uploads of files of any size, allowing seamless document management by accepting original file formats and providing essential metadata for efficient data management.
Resolution of external posting failures
We resolved issues with failed postings in SAP caused by discrepancies in closing dates and incorrect reversal reasons. For example, closing an activation group in January 2024 instead of December 2023 could generate termination journal entries dated 2023, which SAP has already closed, resulting in external posting failures. Using SAP’s document reversal feature, accountants can now fix failed transactions in the ledger report by correcting reversal reasons and adjusting termination entry dates. This ensures accurate, compliant postings while enabling third parties or auditors to track changes easily, improving transparency and compliance.
Duplicate and consistency checks in SAP Posting Bot
The Duplicate and Consistency Check Reports in SAP Posting Bot addresses duplicate transactions that can cause financial discrepancies and audit challenges. Admin users and system administrators can utilize the Duplicate and Consistency Check Report, which scans for duplicates every 24 hours based on criteria like posting period, transaction code, and Nakisa internal document number. This proactive approach helps identify and resolve duplicates efficiently, ensuring system integrity and financial data accuracy. It also supports contract administrators, accountants, and the finance team in maintaining compliance and prevents costly duplicate payments or receipts, saving time and resources.
System configuration
The June and August 2024 releases bring key improvements to system configuration, providing system administrators with greater flexibility and control over setup and management. These enhancements streamline processes, making it easier to adjust configurations and optimize system performance and meet evolving business needs.
Sales taxes
In Nakisa Lease Accounting, the system administrator configures the tax setting to “True”, providing a No Tax Jurisdiction input for each country and linking each company code to its respective country. They also set up the Tax Code Determination for each company code and specified vendor. Contract administrators then enter the terms and conditions, including the required tax inputs, while accountants post financial transactions that incorporate the tax amounts to Nakisa General Ledger and SAP.
User defined fields
User Defined Fields (UDFs) are configurable fields that allow users to add specific types of information within system objects such as Master Agreements and Contracts. They give users the ability to create customized fields tailored to capture and store pertinent data in the database. In Nakisa’s lease accounting software, the system administrator accesses the admin section from the main menu to create a UDF, configuring the field type and status according to requirements. Once set up, the UDF becomes available in subsequent objects, enabling contract administrators and accountants to seamlessly complete the necessary information.
Other key enhancements
In addition to the major updates covered, the January 2024 release introduced several valuable features designed to enhance functionality, streamline operations, and improve user experience across various processes. Here's a closer look at these exciting additions:
- Non-lease indexation in disclosure reports: New Variable Non-Lease columns in IFRS 16 Expense and Cashflow reports provide visibility into non-lease indexation impacts, ensuring consistency across IFRS 16 and ASC 842 reports.
- Multi-currency support for non-lease expenses: Users can now add multi-currency non-lease expenses within a single lease contract, facilitating accurate financial tracking and vendor management across regions.
- Conditional indexation with Max and Min CPI: Lessees can set CPI limits within lease agreements, allowing for smoother CPI adjustments that protect both landlords and tenants.
- Mid-month indexation: Indexation calculations now start on a specific day of the month, ensuring accuracy for arrears scenarios and aligning with payment frequencies.
- Salvage value: Adds a salvage value field for assets with ownership transfer options, excluding salvage from depreciation calculations and supporting lease terms adjustments.
- Change in contract rate/IBR: A new checkbox for contract rate or IBR changes aligns rate adjustments with accounting standards, enhancing usability.
- Default field values: Reduces errors in creating deals by enforcing specific default options, improving accuracy in data entry for lease admins and accountants.
- Disable unit workflow: Introduces an option to skip the reception date step in the unit workflow, streamlining the activation process.
Conclusion
This 2024.R1-R2 product release brings a series of powerful enhancements to Nakisa Lease Accounting for contract administrators, accountants, and contract managers. From streamlining data management with improved mass import functionalities to offering better financial oversight with enhanced reporting and posting capabilities, these updates are designed to increase efficiency, accuracy, and compliance across lease management processes. With smarter workflows, more flexible configurations, and robust tools for maintaining data integrity, this release empowers teams to manage leases and financial data seamlessly while reducing manual effort and potential errors. We are excited to see how these improvements will contribute to more efficient operations and a smoother user experience.
To gain a deeper understanding of these features, explore our NLA demo catalog for a comprehensive overview. For a tailored experience, book a personalized demo with one of our experts today.
To access the latest release notes, please visit the Nakisa Customer Portal or the Nakisa Resource Center.
