Azbil Implements New Lease Accounting Standards with ProPlus Early Adoption

In a significant move towards modernization in accounting practices, Azbil Corporation has successfully implemented the early adoption of the new IFRS lease accounting standards using ProPlus, a robust lease asset management system from ProShip. The company, renowned for its unique global solutions in measurement and control technology, made this adaptation ahead of the mandatory regulation set to be enforced in April 2027. This initiative reflects Azbil's commitment to standardizing accounting processes across their entire group and enhancing operational efficiency in lease management.

Background and Challenges

As part of its strategy to adopt IFRS (International Financial Reporting Standards), Azbil recognized the importance of establishing a unified accounting treatment across its operations. The move towards early application of the new lease accounting standards by April 2026 necessitated a reliable lease management system. Several challenges emerged during the evaluation of potential solutions:

1. Dual Accounting and Parallel Disclosure: The previous lease management system, a SAP add-on, struggled to support the required consolidated lease accounting and dual bookkeeping processes during the parallel disclosure period.

2. Operational Burden and Cost Management: Adapting to the new standards through the SAP add-on demanded detailed requirement definitions, which came with increased operational costs and complexities for the personnel involved.

3. Unified Reporting Platform: To execute a standardized lease accounting treatment, a platform that could accurately output accounting entries for both standalone and consolidated financial statements was essential.

4. Centralized Management of Asset Removal Liabilities: With the IFRS adoption, new requirements arose for managing asset removal liabilities, which also needed to be integrated into existing fixed asset management in a unified manner.

Reasons for Selection

After thorough evaluations of multiple options, Azbil decided on implementing ProPlus due to several compelling advantages:

- Proven Track Record and Support for Early Adoption: ProShip boasts extensive experience, having supported over 100 projects related to IFRS 16 (lease), addressing various challenges that Azbil faced, particularly in early adoption efforts.
- Comprehensive Functionality: ProPlus offers standard functions capable of managing both asset removal liabilities and complexities of dual bookkeeping and consolidated financial reporting, which were lacking in their previous system.
- Compatibility with SAP Systems: Although ProPlus is an independent package, it offers seamless integration with SAP systems to generate precise accounting entries, leveraging Azbil’s existing infrastructure.
- Operational Viability for Group Expansion: The solution was also favorable for deployment across Azbil's domestic subsidiaries, providing robust operational and maintenance support.
- User Experience and Assurance: Positive feedback from existing users, such as Persol Holdings, confirmed the effectiveness of ProPlus in tackling operational challenges, providing reassurance to Azbil's decision-makers.

Implementation Benefits and Future Prospects

Since the initiation of the project, ProPlus has been in action and is working effectively during the parallel disclosure period, operating as the IFRS-compliant version in 2025 and transitioning to the new lease accounting standards in 2026. Azbil aims to solidify the operational usage of ProPlus within its domestic group companies while also improving management of foreign lease contracts and foreign exchange information.

Key benefits identified from the implementation include:

- Standardization of Closing Processes: The entire workflow—from input of contract information, lease assessment, accounting treatment, to preparation of financial statements—has been standardized under the new accounting framework.
- Strengthened Group Operational Framework: A common platform has facilitated greater consistency across domestic subsidiaries, improving the reliability of input data and enabling standardized consolidation packaging operations.
- Enhanced Collaborative Network Among Group Companies: The established system allows for quick information and expertise sharing among group members to efficiently handle operational issues and challenges.

In a statement, a representative from Azbil remarked, “With ProPlus, we have successfully aligned our accounting practices with IFRS standards, emphasizing the importance of unified accounting treatment. The journey came with its complexities, but our collaboration with ProShip has allowed us to navigate through effectively.” The representative also noted the necessity for ongoing training and adjustment in finance management following the system integration.

Looking ahead, Azbil plans to continue refining its use of ProPlus to further advance its lease management strategies and standardization efforts across the organization.

ProShip's Future Projects

ProShip is committed to intertwining their efforts towards supporting the new lease accounting standards with social contribution through their “ProShip Future Support Project - New Lease Accounting Challenge 1100.” This program will donate funds for each company that adopts the new leasing standards, supporting the Japanese Red Cross as an emblem of their corporate social responsibility. As of July 2026, 366 companies have adopted their solutions, raising substantial funds aimed at charitable contributions.

ProShip's role as a leading system vendor in the field of fixed asset and lease management is solidified by over 40 years of continuous technological advancement and commitment to customer excellence. With ProPlus as the mainstay of their offerings, the company stands poised to foster both business growth and social value creation simultaneously.