Real Estate Management
Overview
There were several thousands of real estate properties needed to be managed across multiple brands of restaurants located in different continents. Some were owned, others were leased. Revenue recognition comprised rent revenue, restaurant revenue share, coupled with inflation linked for escalation of rent. Revaluation of assets, amortization, automatic revenue accounting, deferred revenue accounting were the complexities.
INDUSTRY:
Restaurants & Brands
VOLUME ASSETS:
Several thousands across the globe
CASH VOLUME:
US$32 billion across the global system
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Challenges
- Each real estate is either owned or leased or sub-leased.
- Revaluation of depreciated real estate.
- Need for automatic depreciation and amortization.
-
Revenue account reporting with a combination of
> Base rent
> % of sales revenue
> % of sales revenue at different volume threshold - Automatic accounting
- Provisions for common expense sharing such as car park etc.
Complexities were reviewed
Real estate management needs were determined
SAP REFX solution designed and architected
Solution implemented successfully
Solution
- SAP RE-FX solution was selected for implementation.
- Different types of properties were determined – owned, leased, sub- leased
- Master data and business partner were configured.
- Business rules for rental income and revenue sharing were configured.
- Depreciation and amortization parameters were configured.
- Revaluation of assets on a case-to-case basis was enabled.
- Automatic accounting was set up.
- Revenue recognition rules were configured based on IFRS rules.
Scenarios and processes defined
Solution designed and validated
Solution implemented
SAP REFX leveraged and solution powered
Business Benefits Harvested
- Real Estate Master Data tracking was enabled for each category.
- Revenue recognition was enabled based on contracts terms and business rules.
- Revenue accounting was automated.
- Common expenses for accounting of real estate properties was configured.
- Deferred revenue accounting was enabled.
- Depreciation and amortization of real estate asset/ lease value automated.
- Revaluation of expired real estate assets was enabled.
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