HUE Launches Intercompany Lease Elimination Function Compliant with New Lease Accounting Standards, Supporting Group Lease Transactions and Streamlining Consolidated Financial Reporting

Works Applications Co., Ltd. (Headquarters: Chiyoda-ku, Tokyo; CEO: Osamu Hata; hereinafter 'WAP') announces the launch of a new intercompany lease elimination function compliant with the new lease accounting standards in the latest version of its AI-powered cloud ERP 'HUE', effective July 2, 2026. This function supports the elimination of intercompany lease transactions, which have become increasingly complex under the new standards, contributing to greater efficiency and accuracy in consolidated financial reporting.

Background: Rising Burden on Consolidation Processes Due to New Lease Accounting Standards

As companies implement the new lease accounting standards, large enterprises with group operations face new challenges—not only in individual financial statements but also in consolidated reporting. Particularly in intercompany lease transactions, differing accounting treatments between lessors and lessees require contract matching and management of profit and loss differences across multiple periods, placing a significant burden on the creation of elimination journal entries.

Meanwhile, most standard consolidation systems do not retain the necessary data, requiring separate data collection and processing. To address these challenges promptly, WAP has developed this new function.

Key Features: Efficient Generation of Data Required for Consolidation Elimination

This function generates the information required for eliminating intercompany lease transactions based on lease contracts and depreciation data registered in 'HUE'. By performing tasks such as identifying contracts subject to elimination and calculating difference amounts within the lease system itself, it reduces the workload and improves accuracy in consolidation processes.

WAP aims to fully automate intercompany elimination under the new lease accounting standards. Additional features such as automatic generation of offsetting entries for intercompany transactions and retained earnings balance management are planned for rollout from 2027 onward.

In connection with the launch of this function, a comment has been received from Mr. Katsuichi Yamamoto of KPMG/Azusa Audit Corporation.

### Comment from Mr. Katsuichi Yamamoto, Partner, Advisory Division, KPMG/Azusa Audit Corporation

"Efficient elimination of intercompany transactions in consolidated financial reporting is a critical practical issue under the new lease accounting standards. Leveraging individual lease contract data held within lease systems to support the creation of elimination information represents a valuable approach to addressing these operational challenges. Given the complexity and difficulty of offsetting intercompany lease transactions under the new standards, we encourage companies to begin early consideration of their response strategies to ensure smooth implementation."

Related Event: Seminar on Consolidation Compliance Under the New Lease Accounting Standards

WAP will host a seminar featuring Mr. Katsuichi Yamamoto, Partner, and Mr. Yamagishi, Manager, from KPMG/Azusa Audit Corporation, focusing on consolidation compliance under the new lease accounting standards. The seminar will cover practical challenges related to intercompany lease eliminations and introduce this new function.

For details, please visit the seminar page.

About HUE

HUE is an AI-driven platform developed for large Japanese enterprises. Continuously evolving based on customer feedback, it supports a wide range of business requirements across industries. Comprising HUE Composable ERP, HUE Business Platform, and HUE Data Platform, HUE provides a business and data foundation designed for AI integration. With over 2,500 companies already using the platform, its reliability and high evaluation are well established.

HUE Product Page

About Works Applications

Founded in 1996 as a Japan-origin ERP software vendor, Works Applications has supported the growth of major domestic enterprises through innovative solutions such as no-customization and free version upgrades. Committed to maximizing the value of both individuals and organizations, the company aims to be a 'growth engine' by transforming 'work' into 'creation' and making 'jobs' more enjoyable.

Works Applications Co., Ltd. Website: https://www.worksap.co.jp/

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*The content of this release is current as of the announcement date and is subject to change or withdrawal without notice. Forward-looking statements and future outlooks included in this release are uncertain and actual results may differ.

Inquiries

TEL: 03-3512-1400　FAX: 03-3512-1401 Email: pr@worksap.co.jp Public Relations, Works Applications Co., Ltd.