Lease accountingLease accounting with TLE
Tiego Lease Engine is a cloud-based solution for lease accounting. Perfect for both the private and public sector.
Three things that set TLE apart
Tiego delivered the first version of its leasing program in 2014 and has since continued to develop the system to meet the requirements in K3, IFRS, and RKR R5.
Fast and accurate results
Book correctly under IFRS 16, K3, or RKR R5
TLE delivers fast and accurate calculations for all types of lease agreements. The system automatically handles right-of-use assets, lease liabilities, depreciation, and interest expense – without manual calculations.
The result is accounting data that meets all requirements in each framework, ready to be used directly in group accounting.
Built on long experience
Efficiency through detail and audit trail
Tiego delivered the first version of its leasing program in 2014 and has since continued to develop the system to meet the requirements in K3, IFRS, and RKR R5.
The program is built on our long experience in group reporting, where efficiency comes from careful handling of details and a complete audit trail.
Complete note information
Satisfies even the most meticulous auditor
TLE generates complete note information and reports for group entries. All documentation follows a standardized structure that simplifies both internal follow-up and audit.
The system has also evolved into a complete fixed-asset register for all lease agreements, with the ability to store information beyond what is required for accounting. All contracts are recommended to be scanned and stored in the system.
Support for all frameworks
TLE handles K3, IFRS 16, and RKR R5 – tailored to your specific needs and accounting requirements.
K3
Our K3 customers' main focus is to produce the accounting basis for group reporting for cars and machinery classified as finance leases.
How it works
Finance leases under K3 assume the payment schedule is known and the implicit interest rate can be calculated by the system – based on the value at contract start, any initial increased payment, amounts during the lease term, and residual value.
IFRS 16
IFRS customers also work with cars and machinery in the same way as K3 customers, but the term "finance lease" does not exist in IFRS. The implicit interest rate must always be used if it can be readily determined (IFRS 16: p 26).
Implicit interest rate
The value calculation is almost the same as for K3, but the asset value is usually lower because the value at the end of the lease term is discounted if the asset is expected to be disposed of at least the residual value.
Incremental borrowing rate
When the implicit rate cannot be calculated due to missing values, the incremental borrowing rate is used. It is built up from a base rate plus company- or asset-specific risk premiums.
For simple contracts
Minimum requirements are: designation, start & end period, payment frequency, monthly cost, and whether it is paid in advance or in arrears. With this information, TLE quickly creates detailed data that can be analyzed and exported to any group accounting system.
Complex events: Complex events require significantly more information. The framework also requires recognizing a higher asset and liability if the group is "reasonably certain" to extend the contract.
RKR R5
The Council for Municipal Accounting (RKR) has issued recommendation R5 on leasing based on the K3 framework (updated in May 2023 with a discussion paper published in November 2023).
The 80% rule
For lease contracts, RKR's guidance is that they should be accounted for as finance leases if the present value of future payments amounts to 80% of the market value. This requires reasonably fair information on market value, the unguaranteed residual value, and extension periods.
In these cases, the system calculates the implicit interest rate in the same way as for K3, but with market value instead of the asset value and the unguaranteed residual value instead of the buyout price.
In practice, RKR R5 is not only a calculation – it also involves assessments and documentation. TLE is adapted for municipalities and regions by combining support for classification, inputs for market value and residual values, and traceability in how decisions and assumptions affect accounting. This makes it easier to work in a structured way, follow changes in recommendations, and produce audit documentation that stands the test of time.
Differences for RKR compared with K3 and IFRS
Information on market values and unguaranteed residual values
Analysis of customization and strategic significance
Information on the lease asset's useful life
Additional factors according to the framework
Tiego's perspective
There will be many assessments that the municipality/region needs to document and disclose in the notes of the annual report. TLE can be a strong support in a range of considerations. It is common for the implicit rate to differ within a municipality/region and between municipalities/regions and to deviate from the incremental borrowing rate.
How do you get started with TLE?
Read more about our implementation process – from demo to a fully working system.