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Case Study: Ready for the new IFRS16 standard

Case Study: Ready for the new IFRS16 standard

Refresco is the world's largest independent producer of soft drinks and juices, with nearly 60 locations in Europe and North America. Its customers are A-brands and supermarkets. Refresco's market is mature and therefore growth is mainly achieved through acquisitions. Over the past 15 years, Refresco has doubled in size roughly every other year and it now has branches in 11 countries and more than 1,800 leased assets. Because of this level of leased assets, the new IFRS16 reporting requirements for lease commitments have a significant impact on Refresco’s external reporting.

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Refresco is active worldwide, with dozens of production locations. An always up-to-date overview of all 1,800 leased assets and the underlying lease contracts is therefore of great added value. Over the years, however, the various acquisitions have resulted in a substantial mix of systems and administrations. This became a real problem with the arrival of the new IFRS16 requirements. IFRS16 is the new guideline and reporting standard of the International Accounting Standards Board (IASB) for lease commitments. From the beginning of 2019, all external reports have to comply with this standard.

Financial exercise
The new standard means that all of Refresco's lease commitments must be included on the balance sheet: buildings, entire factories, vehicles, production lines effective 2019. This is more than just an accounting exercise. It means identifying relevant contracts, collecting data points and adjusting processes. The impact of IFRS16 on a company's financial position and results can also be significant. For example, Refresco's liability seems to have increased considerably. Moreover, because the lease costs are no longer included in the EBITDA results - as they are now 'below the line' as depreciation - EBITDA is increased. The introduction of IFRS16 is therefore a complex financial exercise that requires more than just a smart automation solution.

The right solution: Planon
Halfway through 2018, Joost Beers became Group Finance Manager at Refresco. The transition to IFRS16 immediately became his responsibility. His first task was to find a good tool for the registration of all lease obligations. From a number of selection rounds, the Planon solution came out on top: this system had the necessary functionalities - such as an easy use interface and the various countries being easily able to add assets themselves - and could be delivered as a secure cloud service. Then Beers looked for the right implementation partner. He had a number of requirements. It had to be a party with the right expertise and of sufficient size to offer continuity even in the event of a setback. A party that gave Refresco the confidence that together they would bring the implementation to a successful conclusion on time. An international presence, plus broad financial and technical knowledge, were decisive aspects for Beers.

Implementation partner: KPMG
KPMG gave Refresco the confidence it was looking for. "I know that KPMG delivers good quality at a high pace, and it has the capacity to guarantee continuity," says Beers. KPMG was asked to implement a fully operational package in four months' time, which would enable Refresco to meet its IFRS16 reporting requirements on time.

"Refresco is an enterprising organisation as you can tell by the size of our head office in Rotterdam. With only 60 people, we serve more than 9,000 colleagues throughout Europe and North America. We expect our partners to fit in with this. We expect them to be action-oriented and, if necessary, to get things done extremely quickly. KPMG made sure that we were able to report, on an IFRS16-compliant basis, from 1 January 2019".

Joost Beers, Finance Manager, Refresco Group



KPMG and Refresco only had a few months - from September to December - to get the IFRS16 solution into operation, including enriched data. A tough schedule. "Thanks to its action-oriented approach, KPMG was able to complete the project on time," says Beers. "In a project like this, you can't schedule an issue in two or three weeks' time. In order to keep up the momentum, we had to address things immediately. This action-oriented approach not only fitted in really well with the Refresco culture, it was also one of the success factors of the entire project." In order to achieve the necessary speed later in the project, both parties first ensured they were well prepared. In a number of brainstorming sessions, they discussed the scope of the project and agreed on the expectations before it started.

Short lines, practical instructions
Every Friday the core team, consisting of three KPMG employees and three Refresco employees, held a conference call so they could discuss everything efficiently. Any hitches or functionalities that worked just that little bit differently in practice: KPMG was always there at an early stage. For example, unexpected user errors led to a request for additional functionality. By hiring additional technical experts, the team quickly found a solution. KPMG's extensive expertise was also useful for answering other questions. For example, KPMG improved the quality of the data, gave pragmatic advice on the implementation of IFRS16 choices and KPMG staff provided training to local financial staff in the 11 countries, so that they could then start using the solution themselves. In the meantime, all countries are now successfully using the solution to maintain the data on the lease commitments, and for budgeting and forecasting purposes.

Complete data set
Prior to the project, local employees did a great job on obtaining all the required lease data from the really varied mix of systems and lease contracts. However, the quality of the data varied considerably. In response to this, KPMG called in additional colleagues to perform data evaluations. This was a valuable exercise for the local employees. It meant that they knew that the quality of the lease information was good after this exercise. In the meantime, KPMG further enriched the data so that the information in the solution was complete and relevant.

Another success factor was the synergy. Because KPMG already had experience with Planon and with complying with IFRS16 obligations at several clients, there was already a template for the solution set-up. Frequently-recurring questions had already been tackled. Questions about authorisation, for example, so that the countries can only view and manage their own data, while there is a complete overview at group level. "We at Refresco are very satisfied with the result and the cooperation. IFRS16 was new to us. So it was great to work with an implementation partner already familiar with it."


  • IFRS16-proof within the scheduled four months: from the first brainstorming session to complete working package.
  • Executed by a multidisciplinary core team of six people: three from Refresco, three from KPMG.
  • Training for approximately 30 financial employees, spread over 11 countries.
  • All lease contracts from 60 production sites now in one package, including consistent data on 1,800 leased assets.
  • Ready to report on lease obligations under IFRS16 as from 1 January 2019.
  • Used by approximately 40 Refresco employees, 30 of whom are from various countries.


"In a project like this, things sometimes turn out differently than expected. It was at those moments that KPMG listened very carefully, that a successful approach was found for the issues identified and that it was implemented immediately. With this time pressure, you can't have a change only scheduled after two or three weeks. In order to keep up the momentum, we had to address issues immediately."

"This action-oriented approach not only fitted in really well with the Refresco culture, it was also one of the success factors of the project. The synergy was another important success factor for us. Because KPMG already had a great deal of knowledge of Planon and the IFRS16-proofing of reports, we benefited from enormous time savings."

Joost Beers, Finance Manager, Refresco Group

More information

Would you like to know more about this project? Please contact Paul Nap, partner or Bram de Jonge, senior manager.

© 2020 KPMG N.V., registered with the trade register in the Netherlands under number 34153857, is a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss entity. All rights reserved. KPMG International Cooperative ('KPMG International') is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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