Implementation of the new standards on revenue recognition (IFRS 15) and leases (IFRS 16) at a multinational, who wanted to early adopt both standards. Being the first adopter in Belgium led to an interesting and challenging project.

Client

The client is a manufacturing company in the chemical industry. The client recently acquired another chemical company to strengthen their presence on global level. Integration of both companies was still ongoing at the start of the project.

Why Excelsius Finance?

Our client looked for a partner with a solid expertise in IFRS, who could perform the project design and implementation of the new standards on revenue recognition (IFRS 15) and leases (IFRS 16), as well as simultaneously analyze the impact of the implementation of both standards on their financial results and systems.

Moreover, the partner would also have to guide the internal personnel and train the key personnel.

Excelsius Finance was a perfect fit for them as it combined the strong IFRS knowledge with relevant project management and IT skills.

The challenge

The client opted to early adopt IFRS 16 in view of the positive impact on the figures. Early adoption of IFRS 16 was only allowed upon adoption of IFRS 15. The client approached us for the worldwide implementation only 6 months before the reporting deadline, which necessitated a tight and highly structured project plan. Moreover, the client was the first early adopter in Belgium.

In addition, the presence of stakeholders around the globe, the limited guidance related to the transition options in view of the early adoption and an incomplete contract database did not facilitate the implementation.

The tool supporting the implementation contained child diseases as the tool was commercialized and fully operational for the first time.

The result

Excelsius Finance was responsible for the project design and project implementation of this conversion. We also analyzed the impact on the financial results and systems. The project was co-sourced with the client’s consolidation team. However, the project scope was not limited to Finance only. Involvement from other functions in the company, such as IT, procurement, HR, tax, treasury, business… was needed as well.

Despite the tight deadline and the challenges encountered during the implementation, the Excelsius approach – supporting and improving people, processes and systems – resulted in a qualitative transition to IFRS 15 and 16 on time in an effective and efficient way.