Introducing PROACTIVE: The Next-Gen ERP for Real Estate Management Aligned with New Lease Accounting Standards

PROACTIVE: The Future of Real Estate Management

In April 2027, new lease accounting standards will take effect in Japan, fundamentally changing how companies handle real estate leases. To aid businesses in this transition, SCSK Corporation has unveiled its AI-native next-generation ERP solution, PROACTIVE, designed specifically to cater to these emerging requirements. This robust system features a dedicated real estate management system alongside the lease asset management function, allowing companies to navigate the complexities of these regulations effectively.

Background of New Lease Accounting Standards

In September 2024, the Accounting Standards Board of Japan introduced new lease accounting standards, mandating that companies register lease liabilities and right-of-use assets on their balance sheets. Previously viewed as mere rental expenses, real estate contracts will now demand thorough attention—from understanding the terms to recalibrating figures during contract modifications. This shift will not only increase the workload for accounting practices but also significantly influence corporate financial indicators such as equity ratios. Furthermore, companies must now cope with the complexities posed by revised regulations related to movable leases, creating a pressing need for an integrated approach to lease management and accounting.

Features of PROACTIVE's Real Estate Management System

SCSK's new real estate management system specifically addresses the challenges posed by long-term leasing contracts, rent adjustments, free rent periods, contract renewals, and partial cancellations—areas where traditional lease asset management systems often fall short. Here are some key features:

Property Management Functionality

The system allows users to register and manage fundamental data about each property, including location, purpose, area, and completion dates. Information can be managed seamlessly across departments—not solely confined to accounting—eliminating inefficiencies and discrepancies that occur with traditional Excel-based management. This ensures that all departments have access to current, consistent data.

Contract Management Capabilities

For each lease agreement, users can input essential details such as lease classification, duration, fees, payment methods, and additional elements like land rights, security deposits, and asset retirement obligations. By utilizing this information, the system can automatically calculate right-of-use assets and lease liabilities, facilitating effortless adjustments when contracts are modified.

Integration with Accounting Systems

The functionalities of the real estate management system link directly with financial accounting systems, allowing for the automatic entry of right-of-use assets and depreciation data, along with rent payment details into payment management systems. This integration ensures streamlined financial statement preparation and payment processes.

Features of Lease Asset Management System

The lease asset management system, on the other hand, is tailored for movable asset leases and rental agreements. It manages everything from contract administration to accounting processes while resolving any discrepancies between accounting and tax treatments. This includes the ability to manage data necessary for tax filings conveniently.

Lease Contract Management Capabilities

Users can register and manage vital information regarding lease duration, fees, and payment conditions. The system also accommodates flexible contract forms specific to movable assets, enabling bulk registration and transitions for efficient management.

Reporting and Data Migration

Users can output essential documents like lease asset ledgers, depreciation schedules, and disclosures, all critical for business operations. Moreover, existing lease asset information can be migrated to a new format compliant with the upcoming standards, significantly reducing the burdensome transition phase.

Future Developments

SCSK is committed to continuously adapting its services in response to regulatory changes and evolving client needs. Through ongoing enhancements of PROACTIVE, the company aims to improve operational efficiency and executive management capabilities for businesses while contributing to increased transparency in financial metrics linked to the new lease accounting standards.

Conclusion

PROACTIVE combines SCSK's intellectual property and operational expertise to deliver a comprehensive digital offering. By integrating varied business functionalities from accounting to HR and sales management, it establishes a platform for automated processes and informed decision-making. With over 7,500 companies currently leveraging this ERP solution, PROACTIVE is paving the way for enhanced operational efficacy in the modern business landscape.

For further inquiries, please contact SCSK Corporation's Business Strategy & Marketing Department at PROACTIVE.