kscope 2013 - balance sheet reporting - design consideration - kscope format
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Balance Sheet & Cash-Flow Reporting in HFM
Design Considerations and Benefits
Alexandre Seran
Table of Contents
l Introductions
l Business Challenges around Balance Sheet Reporting & Analysis
l Recap of HFM Native Capabilities for Balance Sheet Reporting
l Design and Implementation Considerations
l Benefits of the Model
l Q&A
Alexandre Seran ADI Strategies, Principal – Financial consolidation practice lead.
Relevant Professional Experience Part of a large effort to reengineer the Financial Information systems and the corporate dashboards and planning tools, Alex led the design, build, test and deployment of an extensive Financial Consolidation and Reporting solution based on Oracle EPM 11.1.2.1 products. Led the design of a Financial Close Suite and Financial Consolidation Solution for the world largest social media group. Managed multiple Oracle Hyperion Financial Management implementations and upgrades covering the whole scope of work from infrastructure sizing and build to historical data validation and en user training. Following the implementation of a corporate consolidation and planning system for the world’s largest CPG company, Alex led a full system review and environment audit to assure the delivery of business needs and support compliance requirements. Led a company wide financial systems restructuring and reengineering effort including ERP, BI and Analytics work for a multinational Luxury goods company. Led the design and deployment of corporate wide Financial Consolidation, planning and reporting solution for a multinational media and advertising group operating in more than 71 countries in a strict compliance mode. Managed the Global IT Operations with a 10$M annual budget for a multinational media and advertising group operating in more than 71 countries. Supported corporate Financial systems administration team supporting Financial consolidation and Corporate Controlling dashboard for a Multinational Electrical distribution & Energy Management company. Led the corporate information systems transformation to support IFRS Transition for multiple clients in Europe and APAC.
Background Alexandre serves his clients with a unique blend of technical and functional expertise in Financial Systems transformation projects gained with more than 14 years of experience in large multinational organizations in Europe and North America with responsibilities covering Corporate Financial reporting Systems, Process reengineering, ITIL and change management Lead. His career started in Financial Reporting Solutions at Schneider-Electric and prior to becoming a consultant Alexandre was the director of the Financial Reporting systems and the Vice President of Global IT operations for Publicis Group. Alex is fascinated by innovative application of technology to solve business problems and enjoys the thrill of developing business partnering relationships.
EPM/BI Technical Skills • Hyperon Financial Mgmt • Hyperion EPM Architect • Hyperion Calc Manager. • Hyperion Essbase • Hyperion Planning • Hyperion App Link • Hyperion Financial Reports • Hyperion Web Analysis
Industries • Media and Advertising • Utility and Energy Management • Biotechnology • High Technology • Manufacturing • Financial Services • Retail
Expertise • Financial Consolidation • IFRS Transitions • SOX
Industry and Functional Experience
Table of Contents
l Introductions
l Business Challenges around Balance Sheet Reporting & Analysis
l Recap of HFM Native Capabilities for Balance Sheet Reporting
l Design and Implementation Considerations
l Benefits of the Model
l Q&A
For many reasons such as: • Compliance and Audit • Mergers & Acquisitions • GAAP and IFRS requirements
Corporations are required to provide additional Balance Sheet Account positions. With a global economy where many companies are operating internationally:
• Currency Translation, CTA Calculation and • FX Analysis
are requirements for almost every management deck or investors meetings And like never before, Cash and liquidity are one of the key metrics in every analysis deck Generating periodic Cash Flow Reports became mandatory for many organizations The objective of this presentation is to walk you through some design options for your Hyperion application to automate and solve these business needs
Business Needs around Balance Sheet Reporting and Analysis
What we observed in many corporations including some Fortune 100, that • Balance Sheet Analysis (Flux Analysis) are done outside of the Consolidation
Tool, often in Excel reconciliation sheets. • Currency Translation is often considered complex and CTA is used as a
balancing plug • Cash-Flow is calculated at the Consolidated level often outside of the
Consolidation Tool This often results in :
• Lengthy close cycle with longer workdays • Lengthy and challenging Audit Process • Human Errors
• I personally don’t believe that HFM can not do better and so does many CFOs who
approved the investment of implementing HFM.
Common Challenges
Table of Contents
l Introductions
l Business Challenges around Balance Sheet Reporting & Analysis
l Recap of HFM Native Capabilities for Balance Sheet Reporting
l Design and Implementation Considerations
l Benefits of the Model
l Q&A
Out of the Box, HFM provides the following native capabilities:
Account Type Intelligence : Assets / Liabilities / Revenue / Expenses / Balance / Flow
Metadata – Account Dimension Library
Different default rates per account type Metadata – Application Settings
Multiple Translation methods : PVA, … Metadata – Application Settings
Automated Carry-Forward of Accounts Metadata – Scenario Settings
Switch Account Type for some values Assets to Revenue, Balance to Flow…
Metadata – Custom Dimension Settings
Custom Translation of Accounts Rules – Sub Calculate / Sub Translate
Provide commentary and supporting documentation on Financials Web-forms – Cell Text – Attachments
Allow for Multiple Analytical Dimensions Metadata – Application Design
HFM Na0ve Capabili0es
Table of Contents
l Introductions
l Business Challenges around Balance Sheet Reporting & Analysis
l Recap of HFM Native Capabilities for Balance Sheet Reporting
l Design and Implementation Considerations
l Benefits of the Model
l Q&A
Design Components
The following design elements will be used in the proposed solution design:
Alternate Account Hierarchy Provides the necessary Granularity of the BS Flows analysis (Total Cash vs. Individual Cash Accounts)
Balance Flows Custom dimension Provides Framework for the balance sheet flows analysis and the CTA Calculation
Data Source / Audit Trail Custom Dimension
Allows for Audit Trail and supports the automation of the FDM load
Cash-Flow Technical Custom Dimension Required for BS Flows Mapping purposes
Custom Translation Rules Support the Custom Translation and the CTA proof
Calculate Rules Support the overall model design.
Alternate Account Hierarchy
Alternate Account Hierarchy will be used to define a different Granularity of the Balance Sheet Analysis sheet compared to the Financial and Statutory Reporting:
Calculate Rules
This Hierarchy will mimic the current COA and contain only the required levels of analysis. Custom Calculate script will be used to automatically prefill the data
Balance Flows Custom dimension
Leverage a dedicated Custom Dimension to support the Analysis of the Balance Sheet Movements. This dimension will contain members such as : INC / DEC / ICA / DCA … to allow the identification of the different balance sheet movements between the Ending Balance (CLO) and the Beginning Balance (OPE)
This dimension will support multiple purposes in term of Financial Reporting: • Balance Sheet variation analysis (Flux Analysis) • Identify Cash Flow Elements • Provide CTA Proof and identify different FX Impacts • Automate Calculation of Non Controlling Interest • Support different Consolidation processing based on Scope
Changes (Mergers / Acquisitions / Divesture)
For the purpose of our design, this dimension shall contain the following members : • OPE (Beginning Balance) • CLO (Ending Balance) • Flows and Movements (Inc / Dec / …) • CTA (Currency Translation Adjustments)
• FXO / FXM (CTA Components) • CTR (Control) = CLO – OPE – VAR – CTA and shall be Null
Obviously naming conventions and the number of the flows and movements members can be customized for each application.
OPE : Opening
Mvts : Balance Varia5ons
SCI: Scope In
SCO: Scope Out
INC: Increase
DEC: Decrease
DIV: Divendends
…
CTA: Curr. Trans Adjs
FXO: FX Impact on Opening
FXM: FX Impact on Movements
CTR: Control
CLO: Closing
Balance Flows Custom dimension – Member Properties
Once the granularity of the Balance Flows Hierarchy is defined, the following properties will be used for each of the Members of the Balance Flows Hierarchy
Member Switch Type for Flow
Is Calc
Comments
OPE False Y OPE = CLO. Y#Prior.P#Last Custom Translation Rule will be used to use the End of Prior Year Spot rate
CLO False N Member will be loaded via FDM or Input in a web form. It holds the End of Period Balance. Member will be translated by Default using EOM Rate
MVT True N Form Input, Calculated or Load from FDM. These members will be used to explain the changes in the balance sheet balances. Web form cells text or attachments can be used to provide supporting documentations and Audit proofs. Enabling Switch Type for Flow allow these members will be translated by default using AVG Rate.
CTA False Y Aggregated Member = FXO + FXM
FXO False Y Automatically capture the change in currency Translation of the OPE between the EOM Rate and End of Prior Year Spot Rate
FXM False Y Automatically capture the difference in currency translation of the movements (CLO – OPE) between the AVG rate and the EOM Rate.
The FXO and FXM members allows to capture the difference due to currency translation in the CLO -
Audit Trail Custom dimension
This is a frequently used dedicated custom dimension to provide the source of the Financial Information (Load, Adjustments, Eliminations…). The dimension will contain members such as : Input Package, Purchase Accounting, Corporate Adjustments, Consolidation Adjustments, Eliminations… to allow the identification of the different components of the consolidated Financial Statements.
There are multiple best practices around the design of the Audit Trail Dimension such as : 1. Create a member for every type of transaction to be audited. 2. Assign Adjs journal to the appropriate AT Member and use NoInput
Rules to reduce human errors margin and restrict access rights per member if needed.
3. Leverage the use of the AT Dimension in consolidation rules and assign elimination rules to use the appropriate AT Member for Eliminations per account family.
4. Generate Audit Reports by matching the AT dimension with the Value dimension and the BS Mvmts dimensions:
For the purpose of our model, the following Non Consolidated members will be created in the application:
Input FDM_Load Supp_Input
NonConsolidated CFLOW : CashFlow Configuration OR_CURR: Currency OverRides
OR_USD OR_EUR OR_CAD …
Consol_Total GAAP_Adjs Statutory_Total Elimina5ons Conso_Elim GW_Elim DIV_Elim MAR_Elim Maual_Elim Other_Elim Adjustments Conso_Adjs GW_Adjs DIV_Adjs REST_Adjs ACQ_Adjs FX_Adjs Mgmt_Adjs Region_Adjs Corp_Adjs LocalT : Local Total IP: Input Package PAdjs: Purchase Adjusments LAdjs: Local Adjustment
Audit Trail Custom dimension – Member Properties
The following properties will be used for each of the Members of the Audit Trail Hierarchy
Member Aggregation Weight
Is Calculated Comments
NC_CFLOW 0 N This member will be used to allow the input the Balance Sheet Movements to the Cash-Flow
Supp_Input 1 N Additional Input will be done on this member. Best practice would be to use this member for data protection in FDM.
OR_USD OR_EUR …
0 N Currency Overrides will be loaded at the First Opening Balance Period using this Member. For Example, USD Overrides will be input to the intersections: A#EquityAccnt.V#<Entity Currency>.AT#OR_USD
Obviously naming conventions and the number of the flows and movements members can be customized for each application.
Monthly data Entry Process and Flux Analysis
End Bal Beg Bal Control Movements Equity PPE and Fixed Assets Scope Impact Other CTA CLO OPE CTR NIN DIV OCI ICA DCA INC DEC REC NCH MER SCI SCO OTH CHA FXO FXF
Input or FDM Calc Y#Prior.P#Last
CLO-‐OPE-‐ΣMovments
FA100 Goodwill Gross 1,524.05 1,371.65 (0.00) 160.00 (7.59) FA180 Goodwill Impairment (14.76) (13.29) 1.48 1.48
FA100T Goodwill Net 1,509.29 1,358.36 (150.93) -‐ -‐ -‐ -‐ -‐ 160.00 (7.59) 1.48 -‐ -‐ -‐ -‐ -‐ -‐ -‐ -‐ FA102 Business goodwill 552.09 496.88 (55.21) FA103 So^ware 80.04 72.03 (8.00) FA104 Other intangible assets 0.93 0.84 (0.09)
FA10T Intangible assets Gross 633.07 569.76 (63.31) FA20 Amort. and depr. on intangible assets (315.89) (284.30) 31.59
FA150T Intangible assets Net 317.18 285.46 (31.72) FA201 Capitalised finance leases -‐ -‐ FA202 Building improvement -‐ -‐ FA203 Office equipment and furniture 108.35 97.51 (10.83) FA204 Machinery and produc5on equipment 239.59 215.63 (23.96) FA205 Company cars 124.92 112.43 (12.49) FA206 Computer equipment 6.53 5.88 (0.65) FA207 Other tangible assets -‐ -‐
FA30T Tangible assets Gross -‐ -‐ FA281 Capitalised finance leases depr. 0.50 0.45 (0.05) FA282 Building improvement depr. -‐ -‐ FA283 Office equipment and furnitures depr. -‐ -‐ FA284 Machinery and produc5on equipment depr. -‐ -‐ FA285 Company cars depr. 132.80 119.52 (13.28) FA286 Computer equipment depr. 3.01 2.71 (0.30) FA287 Other tangible assets depr. -‐ -‐
FA40T Deprecia0on on tangible assets -‐ -‐ FA200T Tangible assets Net 615.70 554.13 (61.57)
DTA100 Deferred tax assets gross (25.69) (23.12) 2.57 DTA180 Deferred tax assets prov (149.27) (134.34) 14.93
DTA10T Deferred tax assets net (89.35) (80.42) 8.94 FA50T Total financial assets Gross -‐ -‐
FA380 Investments in non consolidated cos prv. (0.50) (0.45) 0.05 FA381 Loans (to third par5es) prov. -‐ LT -‐ -‐ FA382 Other financial assets prov. -‐ LT (380.87) (342.78) 38.09
FA300T Total financial assets Net 234.83 211.35 (23.48) NCA100 Non current assets 192.64 173.37 (19.26)
The below table is a sample design for the Balance Movements data entry form:
Table of Contents
l Introductions
l Business Challenges around Balance Sheet Reporting & Analysis
l Recap of HFM Native Capabilities for Balance Sheet Reporting
l Design and Implementation Considerations
l Benefits of the Model
l Q&A
Benefit 1 : Flux Analysis in HFM
With the current model, users shall be able to leverage HFM Webforms capabilities to store their Flux Analysis. • Cell text and Attachements will be used to store supporting documentations. • Comments and supporting documentations can be published using FR Reports. • Flux Analysis Controls can be triggered using rules to respect thresholds and such requirements
Benefit 2 : Currency Translation and CTA
ASC 830 (Formerly, FAS 52) requires entities reporting in US GAAP to translate foreign currency financial statements to the reporting entities currency which creates a foreign currency translation adjustment. Keys to successfully implementing the automation of currency translation and the benefits gained include: • Consistency in account translation • Avoiding the “Plug” mentality • Automatically updating the entry if adjustments are made at the local entity
Translation will be defined on an account and account type basis: • Assets and Liabilities: Balance Accounts will
translate at “EOM” rate. • Revenue and Expenses: Flow Accounts will
translate at “AVG” rate. • Equity and accounts that should utilize a historic
rate are handled separately. • Historic rate accounts are placed as shared
members in a special account hierarchy “HistTrans”.
• The translation for these accounts to equal: Opening balance + current year activity (translated at average rate) = Closing balance
Application Settings:
Account Metadata:
Benefit 2 : Currency Translation and CTA - Approach
Account Metadata:
Advantages: • Easy to Audit Process • Simple Maintenance for Historic Rate Translation • No need to USD Overrides maintenance. Once the opening Override is loaded, the system will adjust
the translation accordingly
Benefit 2 : Currency Translation and CTA – CTA is not a Plug Accnt. CTA is a result of the difference in translation rates for the Balance Sheet Accounts. The following example is an imitation of a simplified translation adjustment calculation spreadsheet: Often CTA is computed as the Balancing Account of a translated Balance Sheet. This is the result of an inherent presumption in the translation spreadsheet that the balance sheet of the local entity is balanced.
Local Currency Rate TranslatedAssets $100.00 1.50 $150.00Liabilities ($55.00) 1.50 ($82.50)Equity ($25.00) 1.00 ($25.00)Net Income ($20.00) 1.25 ($25.00)
CTA ($17.50)
Rate Table:End of Month: 1.50Average: 1.25Historic: 1.00
Local Currency Rate TranslatedAssets $100.00 1.50 $150.00Liabilities ($55.00) 1.50 ($82.50)Equity ($25.00) 1.00 ($25.00)Net Income ($25.00) 1.25 ($31.25)
CTA ($11.25)
Balanced? ($5.00) $0.00
By applying a methodology that simply takes the difference between the accounts translated at the end of month or spot rate and the historic rate accounts, the systematic CTA entry would falsely balance the balance sheet and be inappropriate. The exact same example with a ($5) error in net income would translate as follows:
Benefit 2 : Currency Translation and CTA – Proof of CTA. The current approach will generate an Account by Account CTA by drawing a comparison between the as translated balance and a separate translation of Balance @ EOM Rate for all accounts. The difference between these calculations equals the currency translation adjustment.
[1] [2]Local Currency Rate Translated EOM Translated2
Assets $100.00 1.50 $150.00 1.50 $150.00 $0.00Liabilities ($55.00) 1.50 ($82.50) 1.50 ($82.50) $0.00Equity ($25.00) 1.00 ($25.00) 1.50 ($37.50) $12.50Net Income ($20.00) 1.25 ($25.00) 1.50 ($30.00) $5.00
CTA ($17.50) =[A] ($17.50) [A]
Balanced? $0.00 $0.00
Difference [1] -‐ [2]
Using the same incorrect income statement example as before, the CTA entry would be $18.75 (the difference between spot rate and average $.25 multiplied by the $5 error).
[1] [2]Local Currency Rate Translated EOM Translated2
Assets $100.00 1.50 $150.00 1.50 $150.00 $0.00Liabilities ($55.00) 1.50 ($82.50) 1.50 ($82.50) $0.00Equity ($25.00) 1.00 ($25.00) 1.50 ($37.50) $12.50Net Income ($25.00) 1.25 ($31.25) 1.50 ($37.50) $6.25
CTA ($18.75) [A] ($18.75) [A]
Balanced? ($5.00) ($7.50)
Difference [1] -‐ [2]
Benefit 2 : Currency Translation and CTA - Proof of CTA.
End Bal Beg Bal Control
Movements
Equity Fixed Assets Scope Impact Other CTA
CLO OPE CTR NIN DIV INC DEC MER OTH CHA FXO FXF
Input or FDM Calc Y#Prior.P#Last CLO-‐OPE-‐ΣMovments
Translated @ Avg Rate
Transla0on Driven = OPE (EOM Rate-‐End of Prior
Year Rate)
Transla0on Driven = (CLO-‐OPE) (EOM Rate-‐AvgRate)
…
Translated @ EOM Rate Translated @ Prior Year Rate
Calculated Member
…
Assets
…
…
…
Liabili0es
…
Calculated = Translated OPE + ΣMovements
Calcuated = End of Prior Year translated Balance
NULL
…
…
…
CTA OPE+ΣFXO + ΣFXF Prior Year CTA
Equity
Balance Sheet
Proof of CTA
Automatic calculation of Historical Rate
eliminating the needs for Overrides
Benefit 3 : Automate the Cash Flow Statement - Main principles The Cash Flow statement is just another way of presenting accounting data, from a cash perspective: it does not require any other information than Balance Sheet and P&L. Under U.S. GAAP, the statement of cash flow can be presented by means of two ways:
• The indirect method • The direct method
The Indirect method will be used in this model taking advantages of the balance sheet flows information loaded by the users.
• Opening and closing balances do not contain enough information: variations must be broken down by movements, using the Balance Flows custom dimension that was mentioned before.
• All accounts should not be treated the same way: • P&L accounts: except the net income, P&L accounts should not be involved.
The data needed to adjust the net income and finally obtain the cash flows from operating activities can be found in Balance Sheet accounts: for instance, depreciation or amortization movements are stored in Fixed Assets accounts.
• Cash and cash equivalents accounts: they do not need to be detailed by movements, as they are a reference in relation to which all other accounts must be explained.
• Other Balance Sheet accounts: they should be assigned a movement that corresponds to a unique line item on the Cash Flow statement.
à Therefore, building the Cash Flow statement is a mapping exercise: it consists in assigning Balance Sheet Account / Movement combinations to Cash Flow line items.
Benefit 3 : Automate the Cash Flow Statement - Numerical example • Here is an example of different Account / Movement combinations:
• If an asset rises, e.g. a Trade Receivable or a Fixed Asset, it implies a cash disbursement. Thus, this movement should be multiplied by -1.
• On the contrary, a decrease induces a cash collection: the movement should then be multiplied by 1.
• For some accounts, the difference between the opening and the closing balance is enough: in this case, an asset which rises from its opening balance to its closing balance means a cash disbursement. The following calculation should then be used: Opening - Closing.
• Regarding Liabilities and Equity accounts, the opposite rules apply. But, assuming that the standard accounting sign convention is used (liabilities and equity as negative numbers), the multipliers remain the same.
Example Opening Net income
Net change
PPE increase
PPE decrease
Capital increase Dividends Appropr.
Net Income Debt
issuance Debt
repayment Control Closing
Cash 1,208 1,745
Accounts Receivable 275 25 - 300
Fixed Assets 890 10 400 (80) - 1,220Cumulated Depreciation (65) (89) - (154)
Total Assets 2,308 3,111
Accounts Payable (113) (13) - (125)
Term Debt (400) (250) 50 - (600)
Share Capital (650) (50) - (700)Net Income (595) 641 (641)Retained Earnings (550) 100 (595) - (1,045)
Total Liabilities (2,308) (3,111)
Benefit 3 : Automate the Cash Flow Statement - Mapping (1 of 4) • That said, Liabilities and Equity are often entered as positive numbers in HFM, and the previous sign
convention is often flipped, as summarized in the following table:
• As shown in the previous example, accounts have diverse profiles in terms of movements: some accounts should be open on operating flows, some on investing flows, some on financing flows. This issue can be addressed with Hyperion native functionalities:
Account type Increase Decrease Opening Closing OtherAssets -‐1 -‐1 1 -‐1 -‐1Liabilities and Equity 1 1 -‐1 1 1Cash & Cash Equivalents 0 0 0 0 0
• Movements can be gathered in different categories, using multiple alternate hierarchies.
• Then, accounts can be assigned a category, using the “Custom Dimension Top Member” attribute. For instance, certain accounts can be flagged with the “Operating” top member, meaning that only the children of the “Operating” movement hierarchy will be available for data entry.
• On the screenshot here, the movement dimension is called “DataNature”.
Benefit 3 : Automate the Cash Flow Statement - Mapping (2 of 4) Cash Flow amounts are technically stored on the Account dimension, in a specific hierarchy. The movements are stored in a Custom dimension, e.g. “BS Flows”.
However, Account / Movement combinations could not be assigned to Cash-Flow items on the Account dimension: • indeed, accounts would then be utilized as both a source and destination dimension, which is
technically impossible. • Therefore, the mapping of Account / Movement combinations involves an additional Custom
dimension. The use of hybrid dimensions is possible.
The Mapping table would be the intersection POVs of the following dimensions: • Account • BS Flows • CF Custom Dimension Amount would represent the sign factor (+1 / -1) When needed, the system administrator can update the mapping table to reflect New Accounts, New Movements or New Cash-Flow line items. Maintenance of the mapping can be done using administration webforms or
Benefit 3 : Automate the Cash Flow Statement - Mapping (3 of 4) The mapping can be managed using web forms, Smartview or load files:
• Valid Movements per account have been filtered using the Custom Top Member. • Account and Movement are displayed in rows. • Cash Flow items are displayed in columns, using a separate Custom dimension.
à Keep in mind, Cash Flow items must be maintained in two distinct dimensions.
• Setting, maintaining and testing the Cash Flow mapping directly in Hyperion can be done using an Excel template to make it easier, leveraging Excel functions, macros and Hyperion add ins.
• This template is designed to be prepared automatically, using an extract of the HFM Metadata. Then accounts and movements are presented in a simple way:
• Accounts are shown in rows, Movements in columns, like in a classical roll forward.
• Then CF items can be picked up out of a list, to map Account / Movement combinations.
• Here for instance, the “OP151” CF item is assigned to the “111001” account on the “OPINC” movement.
Benefit 3 : Automate the Cash Flow Statement - Mapping (4 of 4)
Benefit 3 : Automate the Cash Flow Statement - Calculation • The Cash Flow calculation is a sub routine of the main “Calculate” procedure. It browses all Account /
Movement combinations and affect them to the corresponding Cash Flow item, using the multiplier that was entered as a mapping value.
• The automated Cash Flow should be considered only as a mapping exercise. • Therefore, the sub routine should be run as the last step of the Calculate procedure. • It should also be run for each member of the Value dimension. Thus, translation, eliminations and
other data processing that happen to accounts and movements are simply mapped to Cash Flow items, providing a Cash Flow statement at each step of the consolidation process.
• No translation nor elimination should happen on Cash Flow items themselves. They should just pull their values out from accounts and movements.
• The Cash Flow statement can be calculated for both Year-To-Date of Periodic Views. • To do so, Cash Flow items must be assigned the “Balance” type, just like Balance Sheet
accounts. • Two specific Movement members should be used:
• A “closing” one, that only stores YTD values. For this one, the attribute “Switch type for flows” should be set as No.
• A “movement” one, that stores periodic values. In this case, the attribute “Switch type for flows” should be set as Yes.
à With this methodology, YTD, QTD and periodic cash flows can be calculated, using Hyperion native functionalities.
Benefit 3 : Automate the Cash Flow Statement – Sample Business Rules
Benefit 3 : Automate the Cash Flow Statement - Consolidation • Cash-Flow Mapping is applied consistently for all entities. The cash-flow reports will be available
for each entity that have input their Balance Sheet Movements.
• At a base entity level, the Cash-Flow Items are derived from the Mapping exercise via custom calculate subroutine.
• When performing currency translation, the cash-flow accounts will be derived from currency translated balance figures.
• Currency Translation will be applied to the Balance Sheet Accounts and the movements as described earlier and this will allow for a translated Cash-Flow @ Entity Level
• During the consolidation process, Balance Sheet Accounts (Ending Balance and Movements), will get consolidated to the parent.
• ICP Eliminations gets applied to movements (AR/ AP…) • Balance Movement at Parent level will derive the Consolidated Cash-Flow.
Recap of the Benefits
Systematic Flux Analysis
More Automation Improved reporting Improved Auditability
Automated FX and CTA proof
Automated Consolidated Cash Flow
Table of Contents
l Introductions
l Business Challenges around Balance Sheet Reporting & Analysis
l Recap of HFM Native Capabilities for Balance Sheet Reporting
l Design and Implementation Considerations
l Benefits of the Model
l Q&A
