Transac Adds Major Contract Modification and Update Features to 'Trans Lease Accounting' System

Transac Adds Major Contract Modification and Update Features to 'Trans Lease Accounting' System

Transac Co., Ltd. has announced the addition of a new contract modification and update feature to its lease accounting system, 'Trans Lease Accounting,' designed to handle complex accounting processes in practice.

### Addressing Ongoing Operational Needs The new lease accounting standards will be applicable for fiscal years starting on or after April 1, 2027. Under these standards, operating leases, which were traditionally off-balance sheet, must generally be recorded as lease liabilities and right-of-use assets. However, the real challenge begins after the initial implementation, as enterprises must manage ongoing changes, including lease term revisions due to extension options, contract cancellations, space adjustments, lease payment changes, and impairment of right-of-use assets.

These modifications require more than just overriding a contract master; they necessitate a synchronized update of lease liabilities, right-of-use assets, payment schedules, depreciation, interest calculations, journal entries, and disclosure information. Managing these in Excel poses risks of calculation errors, omissions, and lack of clear audit trails. The new feature allows these changes to be managed as events, with the system performing accurate recalculations and journal entry creation.

### Key Features of Contract Modification and Update Functionality 1. **Lease Term Revisions**: Seamlessly recalculate based on updated terms, including changes in non-cancellable periods or other significant events. 2. **Contract Cancellations**: Automates the write-down of lease liabilities and right-of-use assets, calculating the gain or loss on modification. 3. **Space Adjustments, Fee Changes, and Impairment**: Supports diverse practical changes by dynamically switching necessary input fields and calculation processes. 4. **Audit Readiness**: Tracks change history and allows for storing rationale and decision-making notes per contract, facilitating smooth audit reviews.

### Integrated Management: Tax and Internal Controls Beyond accounting, the system includes features for consumption tax management, tax adjustment data export, approval workflows, and locked data management. This creates a unified environment that bridges accounting, tax compliance, and internal controls.

### Future Outlook A defining feature of the system is the direct involvement of Certified Public Accountants (CPAs) in development and AI fine-tuning. Further updates, including expanded disclosure features and support for transition measures, are scheduled for June 2026, aiming to further alleviate the burden on corporate accounting departments during the first year of compliance.