Automating Ind AS 116 lease accounting

An alternative proposal required Medi Assist to provide a full-time finance person to explain the accounting to the developers. Blume Labs took ownership of both the accounting logic and the software, without requiring a dedicated client finance resource to translate the requirements for the build.

A comprehensive lease accounting product that brings calculations, lifecycle scenarios, reporting, and SAP-ready journal exports into one interface. We handled the accounting requirements, edge cases, development, and product design as one engagement. The scope included:

Setup and configuration

Entity master, GSTIN-based state derivation, GL code mapping per entity to the client's SAP chart of accounts, low-value asset thresholds, fiscal year configuration, and Preparer / Reviewer / Admin roles.

Lease master creation

Lessor details, entity assignment, tripartite flags and split ratios, lock-in periods, payment schedules with escalation logic, classification, incremental borrowing rate, initial direct costs, renewal options, document upload.

Computation engine

Lease liability at present value of future payments discounted at IBR, right-of-use asset, month-by-month amortisation on the effective interest method, straight-line depreciation, escalating rents, and tripartite leases computed independently at each entity's share.

Lifecycle management

All four Ind AS 116 modification scenarios, terminations including early termination with lock-in penalty logic, renewals, and tripartite closure.

SAP export

Entity-wise and period-wise CSVs of month-end, modification, termination and inception journals, mapped to the client's own GL codes, timestamped and attributed.

Quarterly disclosure

Entity-wise and lease-wise workings including maturity analysis across under one year, one to five years, and beyond five years.

Portfolio dashboard

Cross-entity status, alerts for expiring leases, pending renewals and lock-in expiry, total lease liability, ROU asset and monthly expense burn.

Reports and audit trail

Actual rent summaries, amortisation schedules, portfolio balances as at any date, and an immutable log recording every action with user, role, timestamp and full before-and-after state.

Lease calculations are instant, and the manual work of assembling monthly reports has been replaced by system-generated reporting. Journals export in a ready-made SAP template, making the import into SAP easier.

One team owned the accounting logic and the finished product. Medi Assist did not need to assign a full-time finance person to explain the lease accounting to developers.