The Prophix One Platform introduces a purpose-built lease accounting solution, powered by Cradle, a lease accounting expert. In recent years, companies have been required to comply with standards like IFRS 16 (International Financial Reporting Standards) and ASC 842 (US GAAP). Starting in January 2026, FRS 102 will be amended for UK GAAP, adopting a similar on-balance sheet lease accounting model.
As a result, businesses must ensure accurate lease data management, including enhanced disclosure requirements and complex calculations for Right-of-Use assets and lease liabilities. Cradle on the Prophix One Platform centralizes all lease agreements, documents, modifications and related recalculations in one system. This enables users to access detailed insights into their leases more quickly, with automation and reporting tools that enhance audit preparedness and support informed decision-making.
Insight into Lease Management on Prophix One
All lease agreements are loaded into the system and organized by company. Users can add agreements manually or upload them in bulk. Each agreement includes an overview with key values for quick reference, a Net Present Value (NPV) chart, and a detailed depreciation table. Calculations are performed daily, but users have the flexibility to switch to a monthly calculation schedule if preferred.
Users start with the Initial Recognition Tab, where they must complete mandatory fields such as the commencement date, asset class and details of Right-of-Use (ROU) assets. The system includes built-in validations to ensure accuracy and prevent manual errors.
Throughout the life of the contract, changes such as adjustments to end dates, fixed payment amounts, and other terms may occur. These modifications are managed in the Modifications Tab. Users can specify the details that need to be updated, along with the new values. After saving the changes, users are prompted to trigger a recalculation of the agreement, which will update the financials accordingly.
During reporting cycles, users must regularly review their agreements. To streamline this process, events can be created, such as a check on the accounting end date for IFRS 16 companies, as seen below. Additionally, users can automate this task by setting up reminders within the system. These reminders can be configured by selecting specific events, companies, and asset classes. Once set, the user will receive an email with a comprehensive list of agreements that need to be reviewed, providing an efficient starting point for the check.
To support reporting and disclosure requirements, Cradle allows users to generate reports at both the agreement level and consolidated level. Users can customize reports to meet their specific needs. These reports can be easily downloaded in Excel or CSV formats for seamless integration with accounting software. Additional features include customizable fields for non-financial information, GL code mapping at the company or agreement level, foreign exchange (FX) conversion, and sublease accounting.
Conclusion
In summary, Cradle on the Prophix One Platform empowers your lease accounting by offering:
- Seamless compliance with IFRS 16 and/or ASC 842
- Automated journal entries
- A clear audit trail for all modifications
- Improved collaboration across teams
- Customizable reporting and disclosures
- An intuitive and user-friendly experience
Interested in Prophix’s lease management solution? Contact us to learn more.