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Tips and Techniques to Manage Asset Accounting Activities to Stay in Compliance with IFRS
Eric Barlow Managing Partner Serio Consulting

In This Session …
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Asset Accounting (FI-AA) is one of the areas most impacted by IFRS
The SAP solution of many US-based companies is ill prepared to accommodate IFRS Let’s go beyond the theory of IFRS and discuss tangible solutions in SAP

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How does configuration need to change to accommodate IFRS? How do business processes need to change to accommodate IFRS?
Does SAP provide new solutions for IFRS?

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Source: Eric Barlow, Fixed Assets and IFRS Compliance in SAP, slide #3

What We’ll Cover …
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General Ledger design impacts on IFRS solution in Asset Accounting
Changes to Asset Accounting configuration forIFRS

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IFRS requirements impacts Asset Accounting process impacts Wrap-up

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Source: Eric Barlow, Fixed Assets and IFRS Compliance in SAP, slide #4

General Ledger Design Impacts on IFRS Solution in FI-AA
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Parallel Accounting is the biggest challenge to a successful implementation of IFRS for most US-based customers

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SAP solutions designed exclusively for USGAAP and US Tax are not configured to accommodate the multiple standards required by IFRS

The Asset Accounting (FI-AA) solution is dictated by the General Ledger design

Source: Eric Barlow, Fixed Assets and IFRS Compliance in SAP, slide #5

General Ledger Design Impacts on IFRS Solution in FI-AA (cont.)
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There are many ways in SAP to manage the multiple scenarios (US GAAP, Local GAAP,IFRS) that are required by adoption of IFRS
 There is a parallel accounting solution for every customer but the best solution will vary depending on time, budget, requirements, and existing SAP Solution

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The GL design is the first and most important step to successful implementation of IFRS as it establishes how parallel accounting will be managed

Source: Eric Barlow, Fixed Assets andIFRS Compliance in SAP, slide #6

General Ledger Design Impacts on IFRS Solution in FI-AA (cont.)
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Pre SAP ERP (SAP R/3 4.7 and earlier)
 With no upgrade to SAP ERP 6.0
 Account Solution  Parallel Company Codes  Special Purpose Ledger

 Upgrade to SAP ERP 6.0
 Migrate to SAP General Ledger  Account Solution  Special Purpose Ledger  Parallel Ledger

Source: Eric Barlow,Fixed Assets and IFRS Compliance in SAP, slide #7

General Ledger Design Impacts on IFRS Solution in FI-AA (cont.)
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SAP ERP with SAP General Ledger
 Account Solution  Special Purpose Ledger

 Parallel Ledger
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SAP ERP with classic General Ledger
 Account Solution

 Special Purpose Ledger
 Migrate to SAP General Ledger
 Account Solution  Special Purpose Ledger  ParallelLedger

Source: Eric Barlow, Fixed Assets and IFRS Compliance in SAP, slide #8

General Ledger Design Impacts on IFRS Solution in FI-AA (cont.)
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What is an Account solution?
 Uses single ledger for all postings
 Could be the Leading Ledger for SAP General Ledger
Pure IFRS

Accounts

Pure Local GAAP Accounts

 Accounts are “grouped” according to legal reporting requirements
Example  300000 to 400000 Operational Chart  500000 to 550000 IFRS  600000 to 650000 Local GAAP

Common Accounts

 Each group of accounts must be in balance
 Requires extra care to ensure correct account determination  And the establishment of a coding handbook

 IFRS Financial Statements report using common accounts and “pure” IFRS accounts together
 Red oval in diagram

Source:Eric Barlow, Fixed Assets and IFRS Compliance in SAP, slide #9

General Ledger Design Impacts on IFRS Solution in FI-AA (cont.)
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Account solution is recommended where:
 Relatively few valuation differences exist between IFRS and local GAAP  No issue with an increased number of GL accounts

 Standard reporting is used
 Different fiscal years not required

Source: Eric Barlow,...