Hackney Council partners with MHR Analytics and CCH Tagetik for bespoke public sector IFRS 16 solution
MHR Analytics and CCH Tagetik have partnered with Hackney Council to provide the local authority with a best-of-breed reporting solution, purpose-designed for public sector compliance with the important new accounting regulation IFRS 16.
Coming into force in April 2022, IFRS 16 is a very demanding accounting regulation that requires strict compliance when preparing financial statements covering the leasing of assets such as land or equipment. Organisations must collect, collate and report substantial amounts of lease data to remain compliant.
Implementation of the new joint MHR Analytics CCH Tagetik IFRS 16 solution gives the London borough council the ability to manage more than 500 leases quickly and accurately, streamlining compliance. Rather than handling multiple spreadsheets, Hackney’s finance team can consolidate all their leases in one location, with quick access to detailed information.
“IFRS 16 is a complex new regulation that could pose significant challenges. By partnering with MHR Analytics and CCH Tagetik we have invested in a cutting-edge solution to remain compliant and fulfil all the new regulation’s tough requirements while maximising our long-term internal efficiency and resource,” said James Newman, Chief Accountant at Hackney Council.
Selection of the joint MHR Analytics CCH Tagetik IFRS 16 solution followed Hackney Council’s successful and long-standing use of MHR’s industry-leading iTrent HR and payroll platform. With no suitable public sector solution available, Hackney turned to MHR Analytics and its partner CCH Tagetik, part of Wolters Kluwer.
Nick Felton, MHR Analytics SVP, said: “Our solution is designed specifically for the public sector and removes the stresses associated with what could otherwise be a hugely disruptive process. It ensures Hackney will remain compliant without having to invest in substantial new resources and will provide a smooth transition to the new standard”.
“The combination of the CCH Tagetik and analytics solutions of MHR Analytics will give the council significant decision-making insights and all the detailed data analysis it needs.”
The contract for the new MHR Analytics CCH Tagetik solution was signed in July 2020 and implementation will be completed by the end of September 2020.
The solution provides a ‘single source of the truth’ about the council’s leases, as a unified solution that includes a powerful data engine, calculations, reports, workflows and audit trail. With a user-friendly environment for management of leases at all levels of complexity, it features:
- A pre-built Excel upload tool
- Pre-configured data-entry forms for ease of migration and insertion of data
- Processes that run in the background without restricting access or affecting other applications
- Graphical views of assets, liabilities, expenses, depreciation and interest expense
- Modelling of different scenarios for impact on the balance sheet and profit and loss
Flexible and fully ready for extension, CCH Tagetik Lease Accounting software is at the core of the new solution. Built for finance, users can easily adapt the solution without coding. Even if an organisation has thousands of leases, the powerful data engine at the core of the solution processes contract data and makes complex compliance easy.
- IFRS 16
IFRS 16 affects almost every organisation using rentals or leasing as a means of accessing assets. The regulation will create more transparency than ever when it comes to lease obligations on the balance sheet and redefines many financial metrics. It has the capacity to affect credit ratings and borrowing costs, business processes, systems and controls.
“The biggest change is the removal of the distinction between finance leases and operating leases,” added MHR Analytics’ Nick Felton. “From premises through to big-ticket office equipment, IFRS 16 demands detailed consideration of lease data relating to a potentially huge range of assets – many of which were previously dealt with off-sheet. Under the new regime, active lease management is essential. Failures in data collection, calculation and disclosure can all mean sleepwalking towards non-compliance. MHR Analytics’ customers are dealing with more and more legislation and our job is to find the technology and solutions to support them with that.”
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