IAS 14: Segment Reporting. SAP applications have the financial accounting and profit-center accounting functionality needed to provide a robust and flexible basis for both your management reporting and segment reporting needs. Enhanced consolidation systems functionality in SAP.
Business Objects Business Planning and Consolidation supports all management consolidations for segment reporting purposes.
IAS 22: Business Combinations: SAP ERP Financials supports a broad variety of consolidation methods compatible with IFRS. Additional functionality within SAP Business Objects Business Planning and Consolidation enables analysis of potential business impacts from all IFRS-related decisions.
IAS 21: Foreign Currency: SAP software fully supports multiple currencies so that business transactions can be recorded in both transaction and functional currencies as they occur, rather than after the fact. Comprehensive drill-down functions ensure that the original currency and the exchange rate employed are always available. SAP software also provides functions for the revaluation of foreign currency items at market rates on the balance sheet date – and supports the translation of foreign currency financial statements in consolidation.
Saturday, January 23, 2010
Accounting Change as per IFRS
10. Cash-Flow Statements
The statement of cash flows is a mandatory component of financial statements under IFRS, as an equal partner to the balance sheet and the statement of income. Impact: IFRS will require an analysis of existing corporate cash-flow reporting for regulatory purposes. Companies preparing a cash-flow statement for the regulators for the first time will have to decide 1) whether to use the direct or indirect method and 2) how to classify their activities (operating, investment, or financing) according to the categories in IAS 7. Many companies may want to consider changing their chart of accounts and the accounting entry logic in their software programs to obtain the right classification and level of detail.
SAP Solution - The cash-flow statement is an integral part of SAP software’s financial statement reporting functionality. Direct and indirect cash-flow methods are supported. SAP applications also provide standard cash-flow reporting templates.
The statement of cash flows is a mandatory component of financial statements under IFRS, as an equal partner to the balance sheet and the statement of income. Impact: IFRS will require an analysis of existing corporate cash-flow reporting for regulatory purposes. Companies preparing a cash-flow statement for the regulators for the first time will have to decide 1) whether to use the direct or indirect method and 2) how to classify their activities (operating, investment, or financing) according to the categories in IAS 7. Many companies may want to consider changing their chart of accounts and the accounting entry logic in their software programs to obtain the right classification and level of detail.
SAP Solution - The cash-flow statement is an integral part of SAP software’s financial statement reporting functionality. Direct and indirect cash-flow methods are supported. SAP applications also provide standard cash-flow reporting templates.
Accounting Change as per IFRS
10. Cash-Flow Statements
The statement of cash flows is a mandatory component of financial statements under IFRS, as an equal partner to the balance sheet and the statement of income. Impact: IFRS will require an analysis of existing corporate cash-flow reporting for regulatory purposes. Companies preparing a cash-flow statement for the regulators for the first time will have to decide 1) whether to use the direct or indirect method and 2) how to classify their activities (operating, investment, or financing) according to the categories in IAS 7. Many companies may want to consider changing their chart of accounts and the accounting entry logic in their software programs to obtain the right classification and level of detail.
SAP Solution - The cash-flow statement is an integral part of SAP software’s financial statement reporting functionality. Direct and indirect cash-flow methods are supported. SAP applications also provide standard cash-flow reporting templates.
The statement of cash flows is a mandatory component of financial statements under IFRS, as an equal partner to the balance sheet and the statement of income. Impact: IFRS will require an analysis of existing corporate cash-flow reporting for regulatory purposes. Companies preparing a cash-flow statement for the regulators for the first time will have to decide 1) whether to use the direct or indirect method and 2) how to classify their activities (operating, investment, or financing) according to the categories in IAS 7. Many companies may want to consider changing their chart of accounts and the accounting entry logic in their software programs to obtain the right classification and level of detail.
SAP Solution - The cash-flow statement is an integral part of SAP software’s financial statement reporting functionality. Direct and indirect cash-flow methods are supported. SAP applications also provide standard cash-flow reporting templates.
Accounting Change as per IFRS
7. Income Taxes
Taxes payable based on current and prior period business activity must be recorded as a liability to the extent that they remain unpaid on the balance sheet date (IAS 12.12). Deferred tax liabilities are also required to be recognized (IAS 12.15).
Impact: Income tax liabilities based on capital expenditures will be especially complex to track and record. “Taxable temporary differences” have limited exceptions related to goodwill and other business combination issues, but they will generally require careful tracking of all differences between carrying amounts and related tax bases. These amounts will be required to appear on IFRS financial statements.
SAP Solution- All capital expenditures and related asset- and project-tracking systems should be reviewed to confirm all necessary IFRS data is being captured. Research should be conducted to confirm all deferred tax liabilities, and proper entries should be made to reflect them if they do not already exist. Audits may be useful to ensure that updates to the tax basis are well coordinated with changes in the underlying asset and project systems. Sophisticated asset accounting functionality from SAP enables correct tax application of various cost bases, depreciation methods, and useful lives.
8. Leasing
Issue: IAS 17 currently distinguishes between “finance leases” and “operating leases,” though the IASB November 2008 discussion paper is intended to eliminate operating leases as a class and require all leases to be recorded as finance leases by 2011. Finance leases transfer all risks and rewards to the lessee and are recorded as an asset on the balance sheet. Lessors record leases as liabilities on their balance sheets (IAS 17.4, 20 and 25). Operating leases, while they are still allowed, recognize lease payments as expenses over the time period that the asset is used (IAS 17.33).
Impact: Companies will need to review all existing lease agreements to determine their treatment under IFRS. As with depreciation, the standard may have a material effect on production inventory costs. Leasing rules under IFRS could also influence the structure of future lease agreements.
SAP Solution – (IAS 17) Updated lease management and tracking systems may prove necessary as IFRS regulations move toward full “finance lease” treatment for all leases. Review of impacts to production and inventory costing is necessary as well. Through its asset-accounting functions for lessees, SAP software supports accounting for both operating and finance leases. It further offers a complete leasing solution (the SAP Leasing application) that includes contract management and accounting for lessors that can help automate the administration of all agreements.
9. Valuations
Regarding projects and other intangible assets, IFRS specifies that research costs remain as expenses, while development costs must be capitalized once technical or commercial feasibility is established (IAS 38). Marketable securities and hedge accounting require assignment to one of four holding categories that determine presentation on the balance sheet as well as treatment of unrealized gains and losses (IAS 39). Derivative instruments must be tracked on the balance sheet at fair market value, and any other special treatment will require extensive and careful documentation including risk measurement and effectiveness assessment. Long-term contracts, or any agreement extending beyond the term of the reporting period, must be tracked according to percentage of completion (POC) for both construction and service contracts (IAS 11).
Impact: Any significant investment in internally developed projects, from computer software to revenue-producing assets, will need to be treated carefully under IFRS. Project management systems must be checked to ensure they generate the necessary accounting information for proper capitalization and amortization based on feasibility and other project milestones that might be relevant. Hedge accounting and handling of all marketable securities will be especially complex. New applications are often required to meet IFRS criteria in this area, and extensive and careful documentation of all transactions and treatments is required. This is generally regarded as the single most complex area of the new regulations for adopting businesses.
SAP Solution - (IAS 38 & 39). Controlling and project-system functionality enables SAP software to handle long-term construction contracts using the POC method – and to apply a parallel completed-contract method of valuation if needed. SAP treasury applications provide multiple valuation methods for a wide range of financial instruments. In addition, there are options to set up multi-GAAP accounting, using predefined rules in parallel valuation areas. Also supported are comprehensive functions for hedge accounting under IFRS 39 and FASB 133.
Taxes payable based on current and prior period business activity must be recorded as a liability to the extent that they remain unpaid on the balance sheet date (IAS 12.12). Deferred tax liabilities are also required to be recognized (IAS 12.15).
Impact: Income tax liabilities based on capital expenditures will be especially complex to track and record. “Taxable temporary differences” have limited exceptions related to goodwill and other business combination issues, but they will generally require careful tracking of all differences between carrying amounts and related tax bases. These amounts will be required to appear on IFRS financial statements.
SAP Solution- All capital expenditures and related asset- and project-tracking systems should be reviewed to confirm all necessary IFRS data is being captured. Research should be conducted to confirm all deferred tax liabilities, and proper entries should be made to reflect them if they do not already exist. Audits may be useful to ensure that updates to the tax basis are well coordinated with changes in the underlying asset and project systems. Sophisticated asset accounting functionality from SAP enables correct tax application of various cost bases, depreciation methods, and useful lives.
8. Leasing
Issue: IAS 17 currently distinguishes between “finance leases” and “operating leases,” though the IASB November 2008 discussion paper is intended to eliminate operating leases as a class and require all leases to be recorded as finance leases by 2011. Finance leases transfer all risks and rewards to the lessee and are recorded as an asset on the balance sheet. Lessors record leases as liabilities on their balance sheets (IAS 17.4, 20 and 25). Operating leases, while they are still allowed, recognize lease payments as expenses over the time period that the asset is used (IAS 17.33).
Impact: Companies will need to review all existing lease agreements to determine their treatment under IFRS. As with depreciation, the standard may have a material effect on production inventory costs. Leasing rules under IFRS could also influence the structure of future lease agreements.
SAP Solution – (IAS 17) Updated lease management and tracking systems may prove necessary as IFRS regulations move toward full “finance lease” treatment for all leases. Review of impacts to production and inventory costing is necessary as well. Through its asset-accounting functions for lessees, SAP software supports accounting for both operating and finance leases. It further offers a complete leasing solution (the SAP Leasing application) that includes contract management and accounting for lessors that can help automate the administration of all agreements.
9. Valuations
Regarding projects and other intangible assets, IFRS specifies that research costs remain as expenses, while development costs must be capitalized once technical or commercial feasibility is established (IAS 38). Marketable securities and hedge accounting require assignment to one of four holding categories that determine presentation on the balance sheet as well as treatment of unrealized gains and losses (IAS 39). Derivative instruments must be tracked on the balance sheet at fair market value, and any other special treatment will require extensive and careful documentation including risk measurement and effectiveness assessment. Long-term contracts, or any agreement extending beyond the term of the reporting period, must be tracked according to percentage of completion (POC) for both construction and service contracts (IAS 11).
Impact: Any significant investment in internally developed projects, from computer software to revenue-producing assets, will need to be treated carefully under IFRS. Project management systems must be checked to ensure they generate the necessary accounting information for proper capitalization and amortization based on feasibility and other project milestones that might be relevant. Hedge accounting and handling of all marketable securities will be especially complex. New applications are often required to meet IFRS criteria in this area, and extensive and careful documentation of all transactions and treatments is required. This is generally regarded as the single most complex area of the new regulations for adopting businesses.
SAP Solution - (IAS 38 & 39). Controlling and project-system functionality enables SAP software to handle long-term construction contracts using the POC method – and to apply a parallel completed-contract method of valuation if needed. SAP treasury applications provide multiple valuation methods for a wide range of financial instruments. In addition, there are options to set up multi-GAAP accounting, using predefined rules in parallel valuation areas. Also supported are comprehensive functions for hedge accounting under IFRS 39 and FASB 133.
Accounting Change as per IFRS
5. Revenue
Revenue is always to be measured at fair value of receipt or receivable (IAS 18.9). Under IFRS, revenue
can only be recognized after the significant risks or rewards of ownership of goods has been transferred (IAS 18.14), and revenues for services are recognized only according to the extent of completion and whenever they can be measured reliably (IAS 18.20).
Impact: Revenue recognition rules will certainly have a direct impact on many revenue transactions. They may also alter the way companies decide to compensate sales and other personnel.
SAP Solution - SAP software to fulfill various rules of revenue reporting according to IFRS and U.S. GAAP. Revenue recognition provides unlimited flexibility by decoupling the realization of revenues from invoicing and automates the process of revenue reporting. The incentive compensation applications from SAP can further be coordinated to this process to help ensure timely and accurate payments based on governing corporate reporting practices.
6. Employee Costs and Share-Based Payments
Employee costs are to be recognized during the accounting period in which services have been rendered (IAS 19.10). Accruals are necessary for absences, holidays, and vacations (IAS 19.11), and profit sharing and bonus plans also require an accrual (IAS 19.17). Whenever goods or services are received in return for the issue of shares or other equity instruments, fair value must be accounted as either an expense or an asset (IFRS 2.7). In the case of options or other share based incentives, market value of the instruments must be charged as an expense over the period in which the benefits vest (IFRS 2.10).
Impact: North American companies will continue to be required to verify amounts of unrecorded sick time and vacation accumulations, as well as investigate potential for significant equity compensation liabilities that must be brought onto their expense books under IFRS. Updating personnel, benefit, and compensation systems to accommodate the new rules will be necessary to ensure documentation of compliance, as will planning for the orderly transition of the additional expenses to the income statement in cases where equity compensation programs are not currently treated according to IFRS regulation.
SAP Solution - current accounting practices for accrued absences, holidays, and vacations can be confirmed in compliance with IFRS, the major remaining concerns will center on ensuring that shared-based incentives are being properly expensed as they occur. A full assessment of all outstanding obligations will need to be tested against both the balance sheet and income statement to ensure first reporting under IFRS does not produce a sudden difference that might be of concern to investors.
Revenue is always to be measured at fair value of receipt or receivable (IAS 18.9). Under IFRS, revenue
can only be recognized after the significant risks or rewards of ownership of goods has been transferred (IAS 18.14), and revenues for services are recognized only according to the extent of completion and whenever they can be measured reliably (IAS 18.20).
Impact: Revenue recognition rules will certainly have a direct impact on many revenue transactions. They may also alter the way companies decide to compensate sales and other personnel.
SAP Solution - SAP software to fulfill various rules of revenue reporting according to IFRS and U.S. GAAP. Revenue recognition provides unlimited flexibility by decoupling the realization of revenues from invoicing and automates the process of revenue reporting. The incentive compensation applications from SAP can further be coordinated to this process to help ensure timely and accurate payments based on governing corporate reporting practices.
6. Employee Costs and Share-Based Payments
Employee costs are to be recognized during the accounting period in which services have been rendered (IAS 19.10). Accruals are necessary for absences, holidays, and vacations (IAS 19.11), and profit sharing and bonus plans also require an accrual (IAS 19.17). Whenever goods or services are received in return for the issue of shares or other equity instruments, fair value must be accounted as either an expense or an asset (IFRS 2.7). In the case of options or other share based incentives, market value of the instruments must be charged as an expense over the period in which the benefits vest (IFRS 2.10).
Impact: North American companies will continue to be required to verify amounts of unrecorded sick time and vacation accumulations, as well as investigate potential for significant equity compensation liabilities that must be brought onto their expense books under IFRS. Updating personnel, benefit, and compensation systems to accommodate the new rules will be necessary to ensure documentation of compliance, as will planning for the orderly transition of the additional expenses to the income statement in cases where equity compensation programs are not currently treated according to IFRS regulation.
SAP Solution - current accounting practices for accrued absences, holidays, and vacations can be confirmed in compliance with IFRS, the major remaining concerns will center on ensuring that shared-based incentives are being properly expensed as they occur. A full assessment of all outstanding obligations will need to be tested against both the balance sheet and income statement to ensure first reporting under IFRS does not produce a sudden difference that might be of concern to investors.
Accounting Change as per IFRS
3. Inventory and Stock Valuations
Inventory and stock are to be valued at “net realizable value,” which must net estimated selling prices with costs to complete, transport, and sell (IAS 2.9 and 10). LIFO is specifically not allowed, and FIFO may only be applied where items cannot be individually identified.
SAP Solution – (IAS 2): Inventories. With financial accounting, controlling, materials management, and production planning functionality, SAP applications can calculate product costs in the form required by IFRS as well as those that may be required under U.S. and Canadian national accounting standards. It is possible to store multiple versions of the costs for a single material by using the material ledger function. SAP software also offers the ability to calculate the actual costs for each period, required by some other jurisdictions in parallel with IFRS. In addition, it is possible to calculate work in process according to different accounting approaches and to create the appropriate postings for these at period close.
4. Receivables, Payables and Borrowing
Receivables and payables are to be recorded at fair value (IAS 39.43). Subsequent assessments are to be at amortized cost, and anything with a significant credit duration must be discounted (IAS 18.11 contains an example for revenue accounting). Receivables and payables are to be recorded at fair value (IAS 39.43). Subsequent assessments are to be at amortized cost, and anything with a significant credit duration must be discounted (IAS 18.11 contains an example for revenue accounting). If a receivable is in default, its carrying amount is to be written down to its recoverable amount, which can be either “value in use” or fair value less costs to factor (IAS 36.9 and 59). All borrowing is recorded at amortized cost, using the “effective interest rate” method, which deducts borrowing costs from the principal and amortizes them over the period of the debt (IAS 39.46).
Impact: IFRS regulations will require careful review and revaluation of payables and receivables, as credit situations are known. Factoring and borrowing costs, along with related tax and other advantages, will require specific treatments and reporting. This is especially important where different currencies complicate the process and proper translation and revaluation techniques must be maintained.
SAP Solution - a unified approach to producing required cash-flow statements, as well as correctly recording all current asset values according to IFR S, will be in order. SAP software fully supports multiple currencies so that business transactions can be recorded in both transaction and functional currencies as they occur, rather than after the fact. Comprehensive drill-down functions help ensure that the original currency and the exchange rate employed are always available. SAP applications also provide functions for the revaluation of foreign currency items at market rates on the balance sheet date – and support the translation of foreign currency financial statements in consolidation.
Inventory and stock are to be valued at “net realizable value,” which must net estimated selling prices with costs to complete, transport, and sell (IAS 2.9 and 10). LIFO is specifically not allowed, and FIFO may only be applied where items cannot be individually identified.
SAP Solution – (IAS 2): Inventories. With financial accounting, controlling, materials management, and production planning functionality, SAP applications can calculate product costs in the form required by IFRS as well as those that may be required under U.S. and Canadian national accounting standards. It is possible to store multiple versions of the costs for a single material by using the material ledger function. SAP software also offers the ability to calculate the actual costs for each period, required by some other jurisdictions in parallel with IFRS. In addition, it is possible to calculate work in process according to different accounting approaches and to create the appropriate postings for these at period close.
4. Receivables, Payables and Borrowing
Receivables and payables are to be recorded at fair value (IAS 39.43). Subsequent assessments are to be at amortized cost, and anything with a significant credit duration must be discounted (IAS 18.11 contains an example for revenue accounting). Receivables and payables are to be recorded at fair value (IAS 39.43). Subsequent assessments are to be at amortized cost, and anything with a significant credit duration must be discounted (IAS 18.11 contains an example for revenue accounting). If a receivable is in default, its carrying amount is to be written down to its recoverable amount, which can be either “value in use” or fair value less costs to factor (IAS 36.9 and 59). All borrowing is recorded at amortized cost, using the “effective interest rate” method, which deducts borrowing costs from the principal and amortizes them over the period of the debt (IAS 39.46).
Impact: IFRS regulations will require careful review and revaluation of payables and receivables, as credit situations are known. Factoring and borrowing costs, along with related tax and other advantages, will require specific treatments and reporting. This is especially important where different currencies complicate the process and proper translation and revaluation techniques must be maintained.
SAP Solution - a unified approach to producing required cash-flow statements, as well as correctly recording all current asset values according to IFR S, will be in order. SAP software fully supports multiple currencies so that business transactions can be recorded in both transaction and functional currencies as they occur, rather than after the fact. Comprehensive drill-down functions help ensure that the original currency and the exchange rate employed are always available. SAP applications also provide functions for the revaluation of foreign currency items at market rates on the balance sheet date – and support the translation of foreign currency financial statements in consolidation.
Accounting Change as per IFRS
1. Acquisition Accounting, Joint Ventures, and Goodwill:
IFRS requires the identification of an acquirer and measurement of fair value (IFRS 3.17). Measurement of these acquired businesses must be by the IFR S “acquisition method,” including identification of any non controlling interests and goodwill, and fair value valuation for all assets (IFRS 3.36).
SAP Solution – (IAS3) SAP ER P Financials supports a broad variety of consolidation and business combination methods compatible with IFRS.
2. Property, Plant, and Equipment Valuation
All values must be at cost, and though total costs can include things like borrowing, acquisition, and construction or production costs under certain circumstances, these can only be in cases where valuation policies can be shown to be consistent across the entity (IAS 16.15, IAS 23.11). Classes of assets may be revalued, if applied consistently across the entity (IAS 16.3 and 36). Depreciation charged to write off the value of assets over their estimated useful life, down to their salvage value (recoverable amount), must be straight-line.
Impact: Because companies have often used multiple tax, cost, and other management depreciation methods for financial accounting purposes, the transition to IFRS will require extensive analysis and careful planning to smooth the economic impact of potential revaluations.
SAP Solution -– (IAS16): Once a thorough evaluation of all new depreciation methods and their impacts is made, a review of asset tracking and valuation systems is in order, to determine their suitability under the company’s chosen approach to the new regulations.
IFRS requires the identification of an acquirer and measurement of fair value (IFRS 3.17). Measurement of these acquired businesses must be by the IFR S “acquisition method,” including identification of any non controlling interests and goodwill, and fair value valuation for all assets (IFRS 3.36).
SAP Solution – (IAS3) SAP ER P Financials supports a broad variety of consolidation and business combination methods compatible with IFRS.
2. Property, Plant, and Equipment Valuation
All values must be at cost, and though total costs can include things like borrowing, acquisition, and construction or production costs under certain circumstances, these can only be in cases where valuation policies can be shown to be consistent across the entity (IAS 16.15, IAS 23.11). Classes of assets may be revalued, if applied consistently across the entity (IAS 16.3 and 36). Depreciation charged to write off the value of assets over their estimated useful life, down to their salvage value (recoverable amount), must be straight-line.
Impact: Because companies have often used multiple tax, cost, and other management depreciation methods for financial accounting purposes, the transition to IFRS will require extensive analysis and careful planning to smooth the economic impact of potential revaluations.
SAP Solution -– (IAS16): Once a thorough evaluation of all new depreciation methods and their impacts is made, a review of asset tracking and valuation systems is in order, to determine their suitability under the company’s chosen approach to the new regulations.
Friday, January 22, 2010
IFRS and US GAAP: similarities and differences
• Adoption of IFRS includes revenue recognition and provisions & contingencies.
• Noncurrent assets make up a significant portion of many companies' balance sheets, and are a critical part of the operations of a business. Adopting IFRS may have a significant impact on how those amounts are reported, as well as affecting how they are measured for impairment.
• Business transactions are an important part of many companies' business strategies.
Business transactions including business combinations, leasing arrangements and investing activities while discussing the key differences between US GAAP and IFRS in these areas.
• The benefits employees receive can take many different forms including cash, deferred compensation, non-cash awards and post-employment benefits. Accounting under IFRS, defers from US GAAP in the most common types of employee benefits: pensions and share-based payments.
• Noncurrent assets make up a significant portion of many companies' balance sheets, and are a critical part of the operations of a business. Adopting IFRS may have a significant impact on how those amounts are reported, as well as affecting how they are measured for impairment.
• Business transactions are an important part of many companies' business strategies.
Business transactions including business combinations, leasing arrangements and investing activities while discussing the key differences between US GAAP and IFRS in these areas.
• The benefits employees receive can take many different forms including cash, deferred compensation, non-cash awards and post-employment benefits. Accounting under IFRS, defers from US GAAP in the most common types of employee benefits: pensions and share-based payments.
Major areas of treatment under IFRS Reporting
• Acquisition accounting and goodwill (requires purchase method)
• Property, plant, and equipment valuation, including depreciation (primarily “straight line”)
• Joint ventures, associates, and other investments (by rule at either equity method or fair value)
• Inventory and stock (similar to U.S. GAAP lower of cost or market, or LOCO M, and LIFO is not allowed)
• Receivables and payables (all at fair value, with amortized costs)
• Borrowing (amortized cost using effective interest rate method)
• Revenue (at fair value, with specific conditions for recognition)
• Employee costs (accruals for vacations and holidays, profit sharing, expected bonuses, and the like)
• Share-based payment (fair value taken as an expense or as an asset upon first granting)
• Income taxes (taken as a liability if unpaid upon balance sheet date, with other deferral rules)
• Leasing (all leases to eventually be classified as “finance leases” with all risk or reward to lessee)
• Valuations (specifications for fair value, amortized costs, and so forth)
• Property, plant, and equipment valuation, including depreciation (primarily “straight line”)
• Joint ventures, associates, and other investments (by rule at either equity method or fair value)
• Inventory and stock (similar to U.S. GAAP lower of cost or market, or LOCO M, and LIFO is not allowed)
• Receivables and payables (all at fair value, with amortized costs)
• Borrowing (amortized cost using effective interest rate method)
• Revenue (at fair value, with specific conditions for recognition)
• Employee costs (accruals for vacations and holidays, profit sharing, expected bonuses, and the like)
• Share-based payment (fair value taken as an expense or as an asset upon first granting)
• Income taxes (taken as a liability if unpaid upon balance sheet date, with other deferral rules)
• Leasing (all leases to eventually be classified as “finance leases” with all risk or reward to lessee)
• Valuations (specifications for fair value, amortized costs, and so forth)
International Financial Reporting Standards (IFRS) Reporting
International Financial Reporting Standards (IFRS) Reporting
The SEC is considering measures that could lead to retiring US GAAP and adopting IFRS in the US. The effects of global reporting standards on US companies will accelerate over the next few years, regardless of how the SEC proceeds.
Starting in January 2012 it will be necessary to present an IFRS compliant balance sheet.
In view of the above, requirements are coming up from many Companies for the SAP FICO Consultants with IFRS reporting exposure. So the given below information which I have gathered from various recourses will help the SAP FICO Consultants during their interview process.
But in the present client environment, those who are in SAP EEC 6.0 with New GL might have a Leading Ledger with US GAAP reporting and linked with Depreciation area 01 & Asset valuation area 0, as IFRS reporting is
• Two-year dual-reporting periods will be 2012 and 2013 for most customers.
• IFRS-only reporting will be required in 2014.
Beginning in 2011, configure additional non-leading ledgers and additional asset valuation areas:
During this configuration step, both the leading ledger and new non-leading ledger must have the same fiscal-year date settings, and also
• 0L – Leading ledger set to report the local GAAP
• Depreciation area 01 – Asset valuation area 01 (link to the LL)
• Z1 – Non Leading Ledger (NL) set to report IFRS
• Depreciation area 02 – Tied to NL Z1 and reporting IFRS
• Depreciation area 12 – Set to record the delta between the local GAAP and IFRS total; this depreciation area is also tied to NL Z1
The SEC is considering measures that could lead to retiring US GAAP and adopting IFRS in the US. The effects of global reporting standards on US companies will accelerate over the next few years, regardless of how the SEC proceeds.
Starting in January 2012 it will be necessary to present an IFRS compliant balance sheet.
In view of the above, requirements are coming up from many Companies for the SAP FICO Consultants with IFRS reporting exposure. So the given below information which I have gathered from various recourses will help the SAP FICO Consultants during their interview process.
But in the present client environment, those who are in SAP EEC 6.0 with New GL might have a Leading Ledger with US GAAP reporting and linked with Depreciation area 01 & Asset valuation area 0, as IFRS reporting is
• Two-year dual-reporting periods will be 2012 and 2013 for most customers.
• IFRS-only reporting will be required in 2014.
Beginning in 2011, configure additional non-leading ledgers and additional asset valuation areas:
During this configuration step, both the leading ledger and new non-leading ledger must have the same fiscal-year date settings, and also
• 0L – Leading ledger set to report the local GAAP
• Depreciation area 01 – Asset valuation area 01 (link to the LL)
• Z1 – Non Leading Ledger (NL) set to report IFRS
• Depreciation area 02 – Tied to NL Z1 and reporting IFRS
• Depreciation area 12 – Set to record the delta between the local GAAP and IFRS total; this depreciation area is also tied to NL Z1
Monday, May 4, 2009
Transport Request
Transfer the data from sand box to development clientà Whatever Configuration changes you made and save gets saved as task in the change request. There is a Change request sub number below the main CR number. The tasks are stored in the sub request number. You have to release the sub request first and with its release the objects also get released. So you can’t release request without releasing the objects in it.
Subscribe to:
Posts (Atom)
