What is IFRS
Sometime back, I was talking to one of my accountant friends who pointed me some recent changes in IFRS , and provided some link for awareness and to understand the impact in EBS suite. I am not going to put the details, rather will walk through some information that is good to have with ERP consultant who is dealing with Financial products.
IFRS = Financial Reporting standards = Balance Definitions < /FONT >
- Providing bookkeeping rules rather many of us have the impression that they have some rule set for accounting
- It will do Shareholder Reporting, and this is important when :
- A group of companies owned by a Public company
- Not the individual companies
- It will also do external reporting
- To your owners (investors, shareholders)
- Through their stock markets
- Management Reporting
- Maximize investors returns, measured only with IFRS
- Segment Reporting disclosure
- Statutory Reporting
- Tax Reporting
- Regulatory reporting
- Subsidiary reporting
- IASB has been around since 1980â€™s
- IAS/IFRS pretty much converged with the Americans
- If your ERP supports US GAAP, it supports IAS/IFRS
- Key premises (recognition, measurement):
- Mark to Market when possible
- The reality of the Balance Sheet â€“ real assets, real liabilities
- Income Statement analyses the change in wealth
- Deep Disclosure: owners right to know
While looking to some more information on internet ,I discovered a nice article from the site of Fulcrum Inquiry who pointed out the key differences(adopted) between the two standards in there one of the article .
- Maybe requires some reconfiguration, maybe requires some data analysis
- We have noticed there is some big change in R12 AR to meet revenue recognition, R12 is partially on track for IFRS fitness in the suite.
- The new R12 Global Architecture introduced the concept of ledgers which has the capability of providing differing accounting representations; one ledger for example could conform to IFRS, another to local GAAP.
- From the Currency area, we have already noticed some big changes like:
- Balance level Translation or Remeasurement in Ledgers â€“ within Ledger sets, run at one click
- Balance & Activity level Translation or Remeasurement in Financial Consolidation Hub
- Another is enhanced Revaluation [Functional Currency term dropped: conflicts with IAS 21 / FAS 52]