Lease accounting software evaluation checklist: questions to ask vendors about IFRS 16 and AASB 16

A lease accounting software evaluation checklist is a set of questions that tests a vendor's IFRS 16, AASB 16, FRS 102 or ASC 842 calculations, audit trail, general ledger reconciliation, data migration and support model before you sign. LOIS recommends testing each area against one of your own leases rather than the vendor's demo data.

This post is the checklist itself. If you're still working out what the software does and how lease accounting, property and fleet fit together, start with our overview, lease management software: what it does and how to choose, then come back here once you have a shortlist and a demo booked. The five questions below are the ones that separate a good demo from a good system, and each one comes with what a convincing answer sounds like.

How do you test a vendor's IFRS 16 calculation accuracy?

Test calculation accuracy by giving the vendor one of your own leases, ideally one with a CPI-linked rent review and a mid-term extension, and comparing their right-of-use asset, lease liability, interest and depreciation figures against your existing model, period by period. Demo data always reconciles. Your data is the test.

Picture the standard demo. A clean five-year property lease, fixed monthly payments, no options, and every figure agrees to the cent. That tells you the vendor can discount a cash flow. It doesn't tell you what happens when your property team exercises an option in year three, when the CPI reset lands two months after the anniversary, or when one floor of a three-floor tenancy is handed back. Those are the events that produce audit questions, and they're the events to put in front of the vendor.

Ask them to work through the modification live and show you:

• The remeasured lease liability and the matching adjustment to the right-of-use asset, with the discount rate they used and why (an extension takes a revised rate under IFRS 16; a CPI reassessment keeps the original one).
• The revised amortisation schedule from the modification date forward, and whether earlier closed periods stayed untouched.
• The journal for the modification month, not just the closing balances.
• A partial termination, with the gain or loss on derecognition calculated for you rather than left as a manual entry.
• Income statement, balance sheet and cash flow outputs for the same lease over the same three months, so you can see interest and depreciation separated and the cash split between principal and interest.

The same test applies whichever standard you report under. AASB 16 in Australia and NZ IFRS 16 in New Zealand mirror IFRS 16 for lessees; FRS 102 in the United Kingdom and Ireland moved to the same on-balance-sheet model from 1 January 2026; ASC 842 keeps the operating and finance lease split and needs a vendor who can show both. If your portfolio spans more than one, ask for the same lease run under each.

What should the audit trail show?

A lease accounting audit trail should show who changed what, when, and the financial effect of each change: the original inputs, the revised inputs, the recalculated schedule and the journals it produced. Ask the vendor to open the history on a modified lease and read it back to you without reaching for a spreadsheet.

Your auditor asks why the liability on a distribution centre lease moved by $212,000 in March. In a spreadsheet, the answer lives in version fourteen of a workbook, an email thread with the property team and someone's memory of a phone call. In software with a proper audit trail, the answer is a single record: the extension was entered on 12 March by a named user, the revised rate was 5.1 per cent, the remeasurement posted on 31 March, and here's the journal. That's a five-minute conversation instead of a two-day reconstruction.

Questions to ask:

• Is every field change logged automatically, or does the user have to remember to add a note?
• Can a closed period be edited? If so, is the reopening logged, and does it need approval?
• Does the system separate the live working view from the locked period, so a figure reported to the board can't drift afterwards?
• Can auditors be given read-only access to the history, so they can trace a balance back to source themselves?
• Are supporting documents (the signed variation, the CPI notice) attached to the lease record they changed?

LOIS keeps a full audit trail on every lease modification and separates live reporting from the locked-down ledger, which is the control auditors ask about first. For the wider set of documents and reconciliations an auditor will want, our IFRS 16 audit preparation checklist covers the list.

How do you check general ledger integration and reconciliation?

Software with proper GL integration can produce a locked down periodic report that agrees the lease subledger to the GL balances automatically, and thus avoiding a detailed reconciliation process. Ask the vendor to show you that report for a closed month, and ask how journals reach your ERP: a native integration the vendor maintains, or a file someone posts by hand.

Consider what month-end looks like without it. The lease system produces a journal, an accountant rekeys it into the ERP, and three weeks later someone reconciles the two because a modification was posted in one and not the other. Manual reconciliation in spreadsheets across periods is one of the primary causes of close overruns, and it grows with every lease added to the portfolio. The integration question isn't really about connectors. It's about whether the reconciliation exists as a job at all.

Questions to ask:

• Does the platform generate journals in our chart of accounts and posting format, and post them to the general ledger without rekeying?
• Is the integration native and maintained by you, or does it rely on a third-party connector that could break at our next ERP upgrade?
• Show us the periodic report that agrees the lease subledger to the GL balances. Is it locked once the period closes?
• What happens when our chart of accounts changes or we add a new entity?
• If we run an ERP lease module today, what does the migration path look like?

The LOIS lease accounting platform runs a fully autonomous general ledger with automated reconciliations, so the periodic report is a system output rather than a month-end task. If you're weighing a dedicated platform against the lease module inside your ERP, our comparison of lease accounting software and ERP modules sets out where each is strongest.

What should you ask about data migration and onboarding time?

Ask vendors to separate the time to load your lease data from the time to go live with full calculations and automated journals. Platforms with standardised upload templates and pre-configured workflows typically go live in weeks; custom implementation builds run to months. Then ask who validates the migrated data and how errors are surfaced before they reach the subledger.

Take a portfolio that's typical for a mid-market Australian business: 40 properties with option histories sitting in a property database, 600 vehicles across three fleet providers who each send a differently formatted file, and a scattering of equipment and IT leases in a spreadsheet nobody has opened since the last audit. Loading that is one job. Proving that the opening balances agree to what you reported last year is another, and it's the one that decides whether go-live is clean.

Questions to ask:

• Do you provide standardised upload templates, and can bulk fleet data be loaded in whatever format the provider sends?
• When a bulk file arrives, does the system cross-check it against existing records and identify new leases, price changes, CPI adjustments, extensions and terminations before anything is applied?
• Who reconciles our opening balances to the prior period, your team or ours, and what does that report look like?
• For a portfolio of our size, how many hours will you need from our finance team, and over how many weeks?
• Can property and finance users be onboarded at the same time, so the property team's milestone data lands alongside the accounting?

LOIS onboards from spreadsheets or legacy systems using standardised templates and pre-configured workflows, and its fleet module validates incoming provider files against existing data before changes are applied. Our guide to fleet lease management for finance teams shows what that validation step catches in practice.

Should you ask who supports the product, accountants or a help desk?

Yes. Ask who answers when a complex modification lands mid-audit: a CA-qualified lease accountant who can talk through the IFRS 16 treatment, or a software help desk that logs a ticket. LOIS is built and supported by CA-qualified lease accounting experts, and the difference shows most when the question is about the standard rather than the screen.

The scenario is familiar to anyone who has been through a first-year audit. It's the second week of fieldwork, the auditor has queried whether a rent-free period was treated as a lease incentive or a payment adjustment, and your team needs an answer today. A help desk can tell you which field to change. A lease accountant can tell you which treatment is right, why, and what the disclosure note should say. Only one of those closes the query.

Questions to ask:

• What are the qualifications of the people who'll answer our support requests, and are they the same people who ran our implementation?
• Can we speak to someone about accounting treatment, or only about how the software works?
• Do you offer a managed service, where your team validates the data, runs the calculations and delivers the journals and reporting pack each month?
• If we take the managed service, who's accountable for the accuracy of the numbers?

For teams without a dedicated lease accounting resource, LOIS Managed Service pairs the platform with CA-qualified experts who validate the data, run the calculations and deliver fully reconciled, audit-ready outputs each month. Our post on what a lease accounting managed service includes sets out the split of responsibilities.

What else belongs on the checklist?

Three further questions round out the evaluation: whether the platform covers every asset class you lease, whether it will still perform at the portfolio size you'll have in five years, and what the total cost is once implementation, support and any per-module charges are included. Each one is quick to ask and expensive to skip.

• Asset coverage. Property, vehicles, plant, IT equipment and low-value items all fall under the same standard. Ask whether one platform handles all of them, or whether fleet needs a separate tool.
• Scale. A platform that handles 50 leases should handle 5,000 without reporting slowing to a crawl. LOIS runs portfolios from 30 leases to more than 10,000, and asking for a reference at your target size is reasonable.
• Total cost. Ask for the pricing model (per lease, per user, per module), the implementation fee and what support is included, then compare it with the hours your team spends today on spreadsheets and reconciliations.

If you need to turn the answers into an internal case, our guide to building the business case for IFRS 16 and AASB 16 software walks through how to quantify the time and risk you're carrying now.

The vendor question checklist

Take this table into the demo. Score each answer on whether the vendor showed it on your data or described it on theirs.