Download - Ifrs Ebs Final
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Features in Oracle E-Business Suite for International Financial Reporting Standards
Presenter NamePresenter TitleOracle Corporation
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Agenda
• IFRS Update• Planning to Adopt IFRS• IFRS – GAAP Convergence in 2011• Deep Dive into EBS and IFRS
1. Subledger Data Capture
2. IFRS Accounting
3. IFRS Financial Reporting
• Conclusions
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Agenda
• IFRS Update• Planning to Adopt IFRS• IFRS – GAAP Convergence in 2011• Deep Dive into EBS and IFRS
1. Subledger Data Capture
2. IFRS Accounting
3. IFRS Financial Reporting
• Conclusions
IFRS: Around the world alreadyA common standard seems inevitable
Impact of GAAP Convergence & IFRS Take-upProposed Implementation Timeline from FASB & the SEC
2009:
2008 Roadmap To be reviewedBy December ‘09
2011:
SEC evaluates achievement of
roadmap milestones and decides whether to adopt a mandatory
approach for IFRS
2014: IFRS
Large accelerated filers begin filing in IFRS
2015: IFRS Accelerated filers to begin filing in IFRS
2016: IFRS
Non-accelerated filers begin filing in IFRS
Sources: SEC Announcement, Aug 2008; FASB and IFRS published projects
2011: Convergence
US GAAP and IFRS both plan to adopt converged and new Revenue Recognition, Lease Accounting and Financial Statement standards
2012: Convergence
US GAAP Filers file with SEC using new thenew commonRevenue Recognition,Lease Accounting &Financial Statementstandards
You arehere
SimilaritiesSimilarities
ApproachApproach(Some Examples)(Some Examples)
IFRSIFRS US US GAAPGAAP
Revenue Recognition Fair Market (e.g. AR or Inventory Valuation)
Detailed Disclosure
Segment Reporting
Chart of Accounts Not Mandated Distinction Between Tax and External Reporting
DifferencesDifferences
ApproachApproach(Some Examples)(Some Examples)
IFRSIFRS US US GAAPGAAP
Fair Market Revaluation
Fixed Assets &
Investments
Only Certain Fixed
Assets
Extraordinary Items None Rare
Consolidation Control 2 Models
Joint Ventures Proportional OK
Only Equity
“Development” Capitalized Expensed
Fixed Assets Components Unitary
Leasing Financing Cap vs. Op
Inventory No LIFO LIFO OK
Impairment 1 Step, Reversible
2 Step, No Reversal
Much is the Same …But There are DifferencesUS GAAP is always more specific, plus:
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Agenda
• IFRS Update• Planning to Adopt IFRS• IFRS – GAAP Convergence in 2011• Deep Dive into EBS and IFRS
1. Subledger Data Capture
2. IFRS Accounting
3. IFRS Financial Reporting
• Conclusions
ProcurementProcurement
Customer &Customer &Master DataMaster DataManagementManagement
HumanHumanCapitalCapital
Supply Supply ChainChain
Data Capture:Data Capture:TopsideTopsideDetailedDetailed
Re-ConfigureRe-Configureby locationby locationby processby process
CountryCountryCompliance:Compliance:
USAUSA30 non IFRS30 non IFRS
60 IFRS60 IFRSBusinessBusiness
ModelModelChangesChanges
SEC Filing:SEC Filing:ConvergeConverge
Adopt Adopt
AccountingAccountingChangesChanges
IFRSEPM, ERP
& GRCProcess
Dimensions to an IFRS Plan
ProcurementProcurement
Customer &Customer &Master DataMaster DataManagementManagement
HumanHumanCapitalCapital
Supply Supply ChainChain
Data CaptureData CaptureTopsideTopsideDetailedDetailed
Re-ConfigureRe-Configureby locationby locationby processby process
CountryCountryCompliance:Compliance:
USAUSA30 non IFRS30 non IFRS
60 IFRS60 IFRSBusinessBusiness
ModelModelChangesChanges
SEC FilingSEC FilingConvergeConverge
Adopt Adopt IFRSEPM ERP
& GRCProcess
AccountingAccountingChangesChanges
Dimensions to an IFRS Plan
All Stages: Apply Policy and Control ManagementAll Stages: Apply Policy and Control Management
Determine impact on accounting in
subsystems
Configure accounting rules
and set up ledgers
Process and report using dual
accounting
Milestone 3Transactions Recorded
in Multiple GAAPs
Stage 3Stage 3
Record Record Transactions Transactions
in both GAAPSin both GAAPS
Milestone 1Completed Preliminary
Study
Stage 1Stage 1
Study Impact & Study Impact & Determine StrategyDetermine Strategy
Perform Preliminary
Study
Assess Impact
Determine Strategy
Determine changes to
business model
Transform operations using
IFRS results
Report IFRS results, increase
shareholder value
Stage 4Stage 4
Transform Transform Your Business Your Business
& Win with & Win with IFRSIFRS
Milestone 4Business Model
Optimized
Collect GAAP financial results
Adjust and consolidate under
GAAP & IFRS
Report, reconcile and audit results
Milestone 2IFRS Reports Produced
Stage 2Stage 2
Enable Top Enable Top End ReportsEnd Reports
Your Convergence & IFRS Action PlanAchieve “early mover” Advantage
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Agenda
• IFRS Update• Planning to Adopt IFRS• IFRS – GAAP Convergence in 2011• Deep Dive into EBS and IFRS
1. Subledger Data Capture
2. IFRS Accounting
3. IFRS Financial Reporting
• Conclusions
• Joint FASB-IASB project impacting ERP Systems• Currently undergoing development & “General Acceptance”
– Replaces “Revenue Recognition” with “Performance Obligation?– Proposing 2 Revenue Lines on Income Statement?
• We are monitoring, will wait for final standards
Now Public GAProcess
US GAAP2011/2
IFRS 2014No further change?US GAAP:US GAAP:
Detailed GuidanceDetailed GuidanceVSOE, etc.VSOE, etc.
IFRS:IFRS:
General GuidanceGeneral GuidanceIAS 18IAS 18
Converged:
Performance Obligation?
Converged:
Performance Obligation?
RevenueRecognition
GAAP-IFRS Convergence, 2011: Revenue Recognition - Not yet finalized as a standard
• Joint FASB-IASB project impacting ERP Systems• Currently undergoing development & “General Acceptance”
– “Operating Leases” to go away?
• We are monitoring, will wait for final standards
Now Public GAProcess
US GAAP2011/2
IFRS 2014No further change?US GAAP:US GAAP:
Detailed GuidanceDetailed GuidanceCap. Vs. OperatingCap. Vs. Operating
IFRS:IFRS:
General GuidanceGeneral GuidanceIAS 17IAS 17
Converged:
Gross up theBalance Sheet?
Converged:
Gross up theBalance Sheet?
LeaseAccounting
GAAP-IFRS Convergence, 2011: Lease Accounting - Not yet finalized as a standard
• Joint FASB-IASB project impacting ERP Systems• Currently undergoing development & “General Acceptance”
– Moving the page break between the income statement and equity
• We are monitoring, will wait for final standards
Now Public GAProcess
US GAAP2011/2
IFRS 2014No further change?US GAAP:US GAAP:
Certain expenses Certain expenses reported in equityreported in equity
IFRS:IFRS:
Different expenses Different expenses reported in equityreported in equity
Converged:
No or some expenses reported
in equity?
Converged:
No or some expenses reported
in equity?
LeaseAccounting
GAAP-IFRS Convergence, 2011: Financial Statements - Not yet finalized as a standard
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Agenda
• IFRS Update• Planning to Adopt IFRS• IFRS – GAAP Convergence in 2011• Deep Dive into EBS and IFRS
1. Subledger Data Capture
2. IFRS Accounting
3. IFRS Financial Reporting
• Conclusions
Oracle’s History with the IASB
• Monitoring IFRS standards since 2000• Active member of IASB “IT Company Discussion Group”– Attend the Standards Advisory Council (SAC) meeting three
times a year– Provide input on practicality– Get a heads up on features needed
• National domain experts monitor Local GAAP
International Accounting Standards
Board®
Customers Using IFRS in ERP
• E-Business Suite– Emirates Airlines (since 2001)– Hilton Hotels PLC– Michelin– Reuters (since 2002)– Societe National De Chemin De Fer Francais– Westpac
• PeopleSoft– AXA International– Carrefour– European Bank of Investment – John Lewis PLC– Societe Generale
• JD Edwards– Chevron– Juken New Zealand Ltd– LaFarge– Pernod Ricard
Supporting IFRS since Release Xe for E1 and Release A7.3 for World
Supporting IFRS since Release 8.4
Supporting IFRS since Release 10.7
Customers Using IFRS in ERP
• E-Business Suite– Emirates Airlines (since 2001)– Hilton Hotels PLC– Michelin– Reuters (since 2002)– Societe National De Chemin De Fer Francais– Westpac
• PeopleSoft– AXA International– Carrefour– European Bank of Investment – John Lewis PLC– Societe Generale
• JD Edwards– Chevron– Juken New Zealand Ltd– LaFarge– Pernod Ricard
Supporting IFRS since Release Xe for E1 and Release A7.3 for World
Supporting IFRS since Release 8.4
Supporting IFRS since Release 10.7
Stage 2Stage 2
Enable Top End Enable Top End ReportsReports
Stage 3Stage 3
Record Record Transactions Transactions
in both GAAPSin both GAAPS
Stage 1Stage 1
Study Impact & Study Impact & Determine StrategyDetermine Strategy
Stage 4Stage 4
Transform Transform Your Business Your Business
& Win with & Win with IFRSIFRS
Oracle Enterprise Performance ManagementOracle Enterprise Performance Management
Oracle ERP Financials
Oracle ERP Financials
Other ERP FinancialsOther ERP Financials
Oracle Industry Specific
Applications
Oracle Industry Specific
Applications
Oracle Governance, Risk, & Compliance SuiteOracle Governance, Risk, & Compliance Suite
Custom, Legacy,
Competitor
All Stages: Apply Policy and Control ManagementAll Stages: Apply Policy and Control Management
Oracle Enables Key Stages in IFRS Action Plan
IAS/IFRS SUPPORT SINCE 2000Thousands of customers overseas
reporting under IFRS
SPECIFIC IFRS FEATURESSpecific functionality developed for IFRS
IFRS MIGRATION PATHMultiple Ledgers or Multi-GAAP
IAS 2 Inventory Inventory, Costing
IAS 16 Property, Plant FA, ALM
IAS 18 Revenue Rec. OM, AR, BI, CA
IAS 21 Currency Multibook, MRC,GL
More…
Segments, etc.…
Flex / ChartFields…
• Asset Componentization Parent & Child Assets Child Depreciation rates differ
• Impairment Processing Impairment identification Unplanned depreciation
Ledger Set:
DifferencesDifferences
Expanded COAExpanded COA
CalendarCalendar
USDUSD
US PrinciplesExpanded COACalendarUSD
DUAL GAAP ACCOUNTING
GAAP
ERP Products Designed for IFRSE-Business Suite
Approaching IFRS Compliance in ERPExample: IAS 21, Foreign Currency
• IAS 21 Summary (Converged with FAS 52)– Two routes from local accounting to shareholder currency:
“remeasurement” @ historic rates, “translation” @ current rates– Depending on the company’s circumstances and IAS 21 tests
• Product Support– R12 “Reporting Currencies” and “Revaluation” together designed to do both
IAS 21 and FAS 52 Remeasurement and Translation– The company chooses, at each overseas location:
• Transaction Level, if they need to manage the detail in home currency• GL Activity Level, if they populate a “fat GL” or analytic cube• GL Balance level, for a traditional statement oriented approach
– HFM also includes IAS 21 and FAS 52 capability
That is: 8 IFRS Compliant options at each location There are many ways to comply with IFRS in all product areas
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Agenda
• IFRS Update• Planning to Adopt IFRS• IFRS – GAAP Convergence in 2011• Deep Dive into EBS and IFRS
1. Subledger Data Capture
2. IFRS Accounting
3. IFRS Financial Reporting
• Conclusions
Relevant IAS & IFRSPrinciples
•IAS 02 Inventories•IAS 11 Construction Projects•IAS 16 PP&E•IAS 17 Leases•IAS 18 Revenue•IAS 19 Employee Benefits•IAS 23 Borrowing Costs•IAS 41 Agriculture•IAS 32 & 39, IFRS 07 & 09 Financial Instruments•IFRS 04 Insurance Contracts
• Product Support Standard Features in EBS
GL & Subledgers• Specific features in sub
ledgers and industry offerings– Inventory
– Receivables
– Assets
– Projects, HCM, et cetera
• General support through the data model and with features like Subledger Accounting
IFRS Standards that require transaction level data tracking either in generic ERP or in Industry Specific products
1: IFRS Sub-ledger Data Capture in EBS
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Key IFRS-GAAP Differences E-Business Suite Approach
Inventory Costing
• U.S. GAAP - Allowable costing methods include LIFO, FIFO and Average Cost
• IFRS - LIFO not allowed
Inventory Valuation
• U.S. GAAP - Inventory is valued at the lower of cost or market, and cannot be written up at a subsequent date
• IFRS - Inventory is valued at the lower of cost or net realizable value; if the net realizable value of an item that has been written down increases subsequently, then the write-down is reversed under IFRS
SCM products like Oracle Inventory handle Inventory, Costing
They do all the IFRS optionsActual with flavors: landed, period actual, etc.
Standard with flavors: process, BOM, semiconductors
And variances to actual
Rev dates & Inventory AgingReconfigure LIFO to standard or actual
Use a second IO for dual costing
Copyright (c) 2007, Oracle and/or its affiliates. All rights reserved.
InventoriesIAS 02
25
Key IFRS-GAAP Differences E-Business Suite Approach
• U.S. GAAP - Component accounting is permitted; usually assets are depreciated as a whole
• IFRS - Component accounting is required
Assets Componentized assets with different
useful lives• Parent Child features• Grouping Features
API to import the real estate & assessor’s valuations
Asset revaluation
Copyright (c) 2007, Oracle and/or its affiliates. All rights reserved.
Asset ComponentizationIAS 16
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Agenda
• IFRS Update• Planning to Adopt IFRS• IFRS – GAAP Convergence in 2011• Deep Dive into EBS and IFRS
1. Subledger Data Capture
2. IFRS Accounting
3. IFRS Financial Reporting
• Conclusions
2: Corporate Accounting for IFRS in EBS
Relevant IAS & IFRS Principles
•IAS 10 Post balance sheet •IAS 20 Government Grants•IAS 21 Foreign Currency•IAS 29 Hyperinflation•IAS 36 Impairment•IAS 37 Provisions, Contingent•IAS 38 Intangibles•IAS 40 Investment Property•IFRS 01 First Time Adoption•IFRS 05 Discont’d, For Sale•IFRS 06 Mineral resources•IFRS 08 Operating segments
• Product Support In EPM
• Model corporate adjustments
Standard Features in EBS GL & Subledgers• Flexfields, segments and other
chart of accounts features
• Reporting Currencies & Revaluation for translation or remeasurement
• Multiple Ledgers
• Centralized Accounting Engine (SLA)
Specifies the handling of major transactions & situations: work done by CPAs in General Ledger or in Consolidation products
28
Key IFRS-GAAP Differences E-Business Suite Approach
Development Costs
• U.S. GAAP - Development costs are generally expensed as incurred
• IFRS - Development costs (directly attributable expenditure) are capitalized when certain criteria are met
GL and Projects features deploy for Capitalized Development
GL Cost Centers with Balance Sheet accounts capture the costs
Allocate to P&L when time to release
or
Project Accounting stores Projects on the Balance Sheet
Release to P&L via BOM & inventory
• Integration with costing
Direct release to P&L via Project Accounting
Project Time & Costs features
Copyright (c) 2007, Oracle and/or its affiliates. All rights reserved.
Intangible AssetsIAS 38
29
Key IFRS-GAAP Differences E-Business Suite Approach
Identifying Operating Segments
• US GAAP – Segments are based on actual Management Reporting. Excludes intangible assets
• IFRS – Operating segments are identified by Risk and Reward. Includes intangible assets
General and Sub Ledger
Use our very flexible chart of accounts design to tracks and identify different operating segments
Reporting features like FSG with BI Publisher
Copyright (c) 2007, Oracle and/or its affiliates. All rights reserved.
Operating SegmentsIFRS 08
30
Key IFRS-GAAP Differences E-Business Suite Approach
Impairment, specifically Fixed Assets
• U.S. GAAP • Based on fair value • non-reversible
• IFRS• Based on the recoverable amount (the
higher of the asset's value-in-use and fair value less costs to sell)
• Reversible
Assets API to accumulate and contrast
recoverable values API processes losses automatically and
executes all immediate and long-term accounting
Automated comparison & impairment accounting:
Automatically process the losses Automatically execute all the immediate
and long-term accounting
Copyright (c) 2007, Oracle and/or its affiliates. All rights reserved.
ImpairmentIAS 36
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Agenda
• IFRS Update• Planning to Adopt IFRS• IFRS – GAAP Convergence in 2011• Deep Dive into EBS and IFRS
1. Subledger Data Capture
2. IFRS Accounting
3. IFRS Financial Reporting
• Conclusions
3: IFRS Financial Statement Preparation in EBS
Relevant IAS & IFRS Principles
• IAS 01 Financial statements • IAS 27 Consolidate / Separate• IAS 28 Associates• IAS 31 Joint Ventures• IAS 33 Interims• IAS 34 EPS• IAS 07 Cash Flow Statements• IFRS 01 First Time Adoption• IFRS 03 Business Combin’tns• SEC IFRS Regulations under
discussion
• Product Support In EPM
• Hyperion Financial Management
• E-Business Suite OFA
Standard Features EBS GL & Subledgers• E-Business Suite General
Ledger
– Consolidation features like GCS
– Reporting features like FSG with BI Publisher
– Multiple Ledgers & Ledger Sets
Defines what’s included on Financial Statements, and how they should be presented; work done by CPAs in EPM or
GL
33
Key GAAP–IFRS Differences E-Business Suite Approach
IFRS and GAAP Determine Functional Currency using different emphasis
•US GAAP – Cash Flow Based
•IFRS – Factors based with more emphasis on pricing factors.
•Both FAS 52 and IAS 21 specify:
• Remeasurement (Historic Rate Conversion) from Accounting to Functional Currency,
• and Translation (Current Rate Conversion) from Functional to Reporting Currency.
General and Sub Ledgers
Reporting Currencies and Revaluation work together to provide both Remeasurement or Translation
Chose the level of detail per your business needs:
• Subledger Transaction Level
• General Ledger Activity Level
• General Ledger Balance Level
Can also be done in HFM
Copyright (c) 2007, Oracle and/or its affiliates. All rights reserved.
Foreign CurrencyIAS 21
Dual Reporting periodBase Reporting per US GAAP
Preparing 2 years comparativesfor 2015 reporting
IFRS primary GAAP
IFRS adoption year(annual 10K)
(8Qs: US GAAP?)
January 1, 2013
Transition dateOpening
balance sheet
December 31, 2016
1st annual IFRSFinancialStatements
20122012
Amended from © 2008 PricewaterhouseCoopers LLP
20132013 20142014US GAAP for Q1, Q2, Q3
IFRS for all 2015IFRS for all 2015January 1, 2015
Adoption dateGo liveUS GAAP
IFRS
Companies are still “US GAAP” structured businesses until cut-over day, but must value the results using IFRS principles in preparation for thetwo year comparatives they must file with their first IFRS statements.
After the cut-over, they will optimize to the IFRS principles
2012 Convergence:Rev. Rec., Leases
Financial Statements
Legend
20112011
Financial Statements - Dual GAAP ReportingIFRS 01 Adoption, Proposed SEC Regulations
Approaching Dual GAAP ReportingIAS 01 Financial Statements, IAS 27 Consolidate or Separate, IFRS 01, Adoption
• Depends on the customer’s circumstances vis-à-vis IFRS & US GAAP– Top Down approach in EPM Products– Bottom Up approach in ERP Products
• EPM Solutions– Ask if the legacy supports the IFRS functionality in Hyperion– Specific IFRS Dimensionality, IFRS rules engine, etc.– See our EPM show!
• ERP Solutions– EBS: SLA, Ledgers, Multiple Ledgers, Ledger Sets– PeopleSoft: Book Code, Multiple Ledgers, Multi-Book– JDE: Multiple Ledger Types
Dual Reporting System Strategies
Yo
ur IF
RS
Situ
atio
n
System Choices
1 GL Onlyminor differences
GL & Adjustingeasy reconciliation
2 Distinct GLsover 50% different
New GLMajor difference
Re-implementNew ballgame
Structured for GAAP, not IFRS
IFRS facilitates WW system stratification
Many IFRS:US GAAP differences
Limited IFRS:US GAAP differences
GL for National or Regulatory compliance
Valuation different in IFRS
Complexity
Typical Considerations
System Choices:From “Top-down” through Multi-GAAP ledgers and subledger reconfiguration, to the possibility of a do-over
= Companies migrating
HFM OnlyNon sub-ledger
Balancing SegmentValue example: 99
• Semi-Automatic Adjustment
• Adjustment from general ledger balances
• Recurring and Reversing Adjustment
All other segments Ledger Total
Other R11 Multiple
Compliance Tools
• AX, the Accounting Engine
• MRC Ledgers at FX rate = 1
• GCS Ledgers
Release 11i Dual Reporting exampleRelease 11 : Balancing Segment
Release 12 Dual Reporting : What’s different to 11iRelease 12: Subledger Accounting, Multiple Ledgers, Ledger Sets
SubledgSubledger er
AccountiAccountingng
SubledgSubledger er
AccountiAccountingng
DrDr CrCr
Operating UnitOperating UnitOperating UnitOperating Unit
Can choose to use:• A (full) Secondary Ledger• Complete alternative accounting
or • An Adjusting Ledger, (or Segment)
• Automatic business reconciliation• Fewer adjusting entries• Easier feed to Hyperion
Can choose to use:• A (full) Secondary Ledger• Complete alternative accounting
or • An Adjusting Ledger, (or Segment)
• Automatic business reconciliation• Fewer adjusting entries• Easier feed to Hyperion
Account Balance Debit Credit US GAAPDevelopment Expense 500,000 1,500 501,500 Employee Payables (100,000) 1,500 (101,500)
Adjusting Ledger AdjustmentCapitalized Development 500,000 1,500 501,500 Development Expense (500,000) 1,500 (501,500)
Ledger Set IFRSDevelopment Expense - 1,500 1,500 - Employee Payables (100,000) - 1,500 (101,500) Capitalized Deveopment 500,000 1,500 - 501,500
Primary Ledger
US PrinciplesExpanded COA
CalendarUSD
DifferencesDifferencesExpanded COAExpanded COA
CalendarCalendarUSDUSD
Ledger Set:
GAAP
AccountingAccounting
PrimaryPrimaryPrimaryPrimary AdjustingAdjustingAdjustingAdjusting
Release 12 Dual Reporting ExampleRelease 12 : Adjusting Ledger in a Ledger Set
Adjusting Ledger• Automatic Adjustment • From subledger data• SLA Driven
Adjustments
Base Ledger Total Ledger Set Total
Ledger SetLedger 1 = BaseLedger 2 = Adjusting
Endgame: Adopting IFRS, walking away from GAAPA Function of your Dual Reporting Choices
1. Many subsidiaries will retain GL and subsystems in compliance with either• Statutory requirements (foreign subsidiaries)
• Regulatory legislation (utilities, financial services, etc.)
2. Some will find that their existing GL is quite appropriate, but that they have a few subsystem areas that will require adjustment
3. Others will require that they need to do something more substantial, for example restructuring their business, up to the point of reimplementing
Hyperion
ERP GL Multi-GAAP Features
ERP Subledgers
DifferencesDifferencesExpanded COAExpanded COACalendarCalendarUSDUSD
IFRS PrinciplesIFRS PrinciplesExpanded COAExpanded COACalendarCalendarUSDUSD
Ledger Set :
US PrinciplesUS PrinciplesExpanded COAExpanded COACalendarCalendarUSDUSD
GAAP
DifferencesDifferencesExpanded COAExpanded COACalendarCalendarUSDUSD
Ledger Set:
You are a US GAAP company with IFRS comparatives
You are an IFRS company with US GAAP history
GAAP
• Update Primary ledger with TB from Adjusting ledger so it ties to IFRS
• Complete subsystem configuration adjustments
AdjustingAdjustingPrimaryPrimary
AdjustingAdjustingPrimaryPrimary Optional:
drop when no longer needed
Dual Reporting Period IFRS from now on Period
Endgame: Adopting IFRS, walking away from GAAP
An IFRS Migration Path
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Agenda
• IFRS Update• Planning to Adopt IFRS• IFRS – GAAP Convergence in 2011• Deep Dive into EBS and IFRS
1. Subledger Data Capture
2. IFRS Accounting
3. IFRS Financial Reporting
• Conclusions
Summary : EBS is designed for IFRS
• Thousand of EMEA & APAC Customers using EBS for IFRS today, since 2005• IFRS Compliance built into our Strategic practice• Many regular “external reporting” features are IFRS
configurable – and you may need to reconfigure• Special IFRS features are in the products• Migrations process fits your situation– Can do on Release 11, automated transactions in Release 12
– Configurations for easy, typical, & difficult reporting cases
• EBS is ready for IFRS now. So are HFM and GRC.
IFRS Change Potential for Business Transformation
IFRS OK for SEC and for 60+ countries’ statutories
• Improve dramatically your reporting process, consistency, and management vision
• Consider instance, ledger, data consolidation
• Consider shared service accounting & reporting centers
IFRS book leases as liabilities
• Consider buying that fleet of planes you use
• Evolve your leasing revenue business to an equipment sales business
Capitalize R&D • Move those 2009 Development expenses to the Balance Sheet – recognize in P&L, matched to Revenue, in 2010- 2011
Transform Your Business with IFRS Going Beyond Compliance
Companies are required to retrospectively apply IFRS to all periods presented as if they had always been in effect.
Cumulative Reporting Requirements
During the transition period from US GAAP to IFRS, firms must continue to report in US GAAP and any local statutories, as well as begin tracking IFRS equivalents.
Multi-GAAP During Transition
A study comparing of the impact of IFRS adoption in the UK reveals that net income generally rose by 39% while equity declined by 23%. UK GAAP is considered close to US GAAP in most areas.
Potential Impact on Bottom Line
Don’t Know 9%
Within 3 years55%
Within 7 years
8%
Within 5 years26%
Growing awareness of complex requirements…
…drives preference for early planning and assessment
Sources: European Financial Reporting Research Group; Deloitte Touche Tomatsu
More than 7 years
2%
““ No one anticipated how big it was going to be. Every company was too late and too slow in preparing – even the good ones.” Ken Wild, Global IFRS Leader, Deloitte
Within what timeframe would your company adopt IFRS if given a choice?
Source: Deloitte, 2007
Impact on US CompaniesThe Value of Starting Early
Key Takeaways
To Learn More
Oracle Financials Product Marketing BlogOracle Financials Product Marketing Blog
Oracle Financials Product Marketing Blog: http://www.blogs.oracle.com/FinancialsMkting/
Oracle IFRS page (White Papers, News, Events)Oracle IFRS page (White Papers, News, Events)
IFRS Page on Oracle.com:
http://www.oracle.com/applications/ifrs/index.html
Oracle EBS IFRS WhitepaperOracle EBS IFRS Whitepaper
Oracle E-Business Suite IFRS Whitepaper:
http://www.oracle.com/applications/financials/preparing-us-companies-for-the-transition-to-ifrs-white-paper.pdf