sap ıfrs sunumu

Follow the SAP Roadmap toIFRS Compliance

Gary FullmerSAP Labs

Mark LombardSAP

© SAP 2009 / 1

A brief overview of IFRS and its implicationsIFRS conversion project example – SAP AGIFRS proposed timeline and implementation considerations (US view)SAP ERP focused IFRS adoption roadmap

– Scenario 1 – Use Parallel Ledger– Option 1– Option 2

– Scenario 2 – Use Account Based Configuration– Option 1– Option 2

Examples of Frequently Asked QuestionsWrap-up

Agenda

© SAP 2009 / 2





Agenda

© SAP 2009 / 3

What is IFRS?

International Financial Accounting StandardsGlobal wide standard for financial accounting and reportingCurrently in use in most of the world– Europe, Japan, Australia, China, etc.– Other countries are in the process of changing from local GAAP to International Financial Reporting

Standards (IFRS)How it affects you — Key deadlines

US SEC has “proposed” a deadline of 2014Some companies have the option reporting in the IFRS format as early as the end of 2009Dual Reporting begins in 2012Requires re-statement of opening 2012 Balance Sheet to IFRS standardsIFRS cutover from Local GAAP to IFRS is 2014– Local GAAP reporting requirements will not go away– Some industries will still require Local GAAP reporting

– Utilities, Oil and Gas — FERC reports remain US GAAP

Other key points to considerThe IFRS “answer” will be specific to your company, industry, and country– “One size fits all” does not apply for IFRSPrior planning including your consulting/audit partner and SAP is essential for success

Key Points — IFRS Adoption

© SAP 2009 / 4

Are There Any Benefits to IFRS?

Improved quality of reporting –A globally accepted set of principles-based standards may offer opportunities to consistently apply accountingstandards

Improved transparency and investor confidence –As use of IFRS becomes more widespread, the new standards will increase comparability for investment analysisand performance measurement

Reduced accounting complexity –US GAAP accounting rules are viewed as complex and difficult to applyIFRS in based on “principles” not rules which will provide the opportunity for more clear representation of financialresults

Potential process and cost efficiencies –The same financial reporting standards across the world will provide opportunities to simplify and centralizefinancial reporting processes and functions

Cost of capital –A single global financial reporting standard will enhance the efficiency of capital allocation and should reduce thecost of capital

Process and technology optimization –Converting to IFRS may provide an opportunity to improve and streamline key components of the current SAPlandscapes

SAP and our Partners see these benefits

© SAP 2009 / 5

Key IFRS Challenges

IFRS implementation is not only a reporting project. There are significant impacts on:Company organization — Both corporate and subsidiary levelsValuation of individual business transactionsTransactional systems — May need software and hardware upgrades

Approaching key deadlinesEarly project planning and analysis leads to successful project

Parallel reportingNeed to run parallel reporting to enable prior year comparisons between the Local Accounting Standardand IFRS during the transition periodsNeed the ability to easily compare, reconcile, and explain the differences / changes between the LocalAccounting Standards and IFRS

Broad implicationsImplementation requires cross-functional team — Financial accounting, management accounting, tax, IT,Consulting Partners, and SAP ServicesNew closing process required to include additional new IFRS-specific information without increasing closingcycles

Transaction changesTop-side adjustments at a consolidation level may not always be sufficient to meet all IFRS requirements— Some changes may be appropriate at the SAP ERP / transactional levelNeed to capture additional data / information to meet extensive disclosure requirements

© SAP 2009 / 6

What Our Partners Are Saying About IFRS ...Selected Quotes

“While market assessments and sizing are still very immature, the US adoption of IFRS could belarger than the Sarbox investment was.

“Nonetheless, ‘the IFRS train has left the station’ and will be arriving in the United States at somepoint. Movement to IFRS has the support of the SEC, FASB, FAF, many US companies, andmany accounting firms.”

“We are looking at doubling our legal compliance staff”

“We looking to acquire a small accounting firm to build up our IFRS team”

10% of accounting line items are impacted when moving to IFRS from US GAAP

Currently we are scoping a 400,000 hour project for IFRS consulting and an upgrade to ERP 6.0

Accenture, PWC, Ernst &Young, Deloitte and Goldman Sachs among others

© SAP 2009 / 7

Potential Impact of IFRS on an SAP LandscapeFrom Ernst and Young

FI - Financial

CO - Controlling

AC – Asset Accounting

PS – Project Systems

HR – Human Resources

PP – Production Planning

MM – MaterialManagement

PM – Plant Maintenance

QM - Quality Management

SD – Sale andDistribution

Possible ImpactNeed to investigate to determine magnitude

SAP modules Process Areas

Manufacturing industry example

Purchasing Depreciation Sales Tracking

Make to Order Plant Shut Down Third Party Billing

GeneralLedger Book Close Accounts

ReceivableAccountsPayable Tax Consolidations SPL

Cost Element Cost Center Profit Centers Internal Orders ABC Costing Product Costing

Requisitions Purchase Orders Good Receipts InventoryManagement Bill Of Materials Master raw

materials

Employment History Payroll Training Career Management

Labor Material Down time and outages

Capacity Planning Material requirementsplanning Shop Floor

Planning Executions Inspections Certificates

RFQ Sales Orders Pricing Picking Packing Shipping

Masterproduction scheduling

Source: Ernst and Young

© SAP 2009 / 8

IFRS Impacts to Our Clients – Industry InsightsFrom Accenture

OG Industry Level ofImpact Key Drivers

Products

CGS H Inventory, PP&E, Raw Material Hedges

Airline M Extensive use of leases, fuel hedges, PP&E

IndustrialEquipment M Revenue recognition – project accounting, LIFO reserves, PP&E

Retail H Leases, Asset Impairment (Store closures), PP&E, Inventory, Revenue Recognition, Taxes

Travel M PP&E, Advertising, Leases

HLS H Business Combinations, Intangibles (R&D), Asset Impairment, Inventories, PP&E, Contingencies andProvisions (Product Liability)

Automotive H Intangibles (R&D), Inventories, Asset Impairment, Restructuring, Contingencies and Provisions (LossContracts and Restructuring)

FinancialServices

Banking H Financial Instruments, derivatives, Asset-backed Securities

Capital Markets M Financial instruments, Derivatives, Advertising, Customer Loyalty Programs

Insurance H Insurance Contracts, Financial Instruments, Revenue Recognition, Financial Disclosure Reporting

More research is required but our hypothesis is that certain industrieswill be impacted more than others due to IFRS.

Slide from Accenture

© SAP 2009 / 9

IFRS Impacts to Our Clients – Industry InsightsFrom Accenture (cont.)

OG Industry Level ofImpact

Key Drivers

Resources

Forest Products L LIFO, PP&E, Real Estate, Leases

Freight-Logistics L PP&E, Leases

Metals L PP&E, LIFO

Mining M PP&E, LIFO, Leases, Revenue Recognition – project accounting, real estate

Utilities H PP&E, Intangibles, Asset Impairments, Derivatives (hedges), Leases, Provisions, Taxes, BorrowingCosts

Chemicals M PP&E, R&D, Environmental Provisions, Impairment Testing, Joint ventures LIFO reserves

Energy H PP&E, Depletion Accounting, Joint Ventures, Business Combinations, Intangibles (R&D), Reserves,Revenue, Taxation, Environmental Liabilities, Derivatives

Building Materials L LIFO, PP&E, hedges

CHT

Media andEntertainment

L Intangible Assets – impairment testing, Revenue Recognition – multiple element arrangements,PP&E

Communications M PP&E, Leases, Impairment Testing, Revenue Recognition, R&D, Advertising, Customer LoyaltyPrograms

Aerospace and Defense M PP&E, Impairment Testing, LIFO, R&D, Derivatives, Revenue Recognition – project accounting

Electronics and HighTech

H R&D, Revenue Recognition – multiple element arrangements, Asset Impairment

Slide from Accenture

© SAP 2009 / 10





Agenda

© SAP 2009 / 11

SAP AG Was Faced With Numerous FinancialReporting Requirements

SAPSubsidiary

SECNYSESEC

NYSE EUEUFrankfurt

StockExchange

FrankfurtStock

Exchange

GermanLegislation

&Standards

GermanLegislation

&Standards

SAP AG

SAPSubsidiary

SAPSubsidiary

SAPSubsidiary

SAPSubsidiary

NationalLegislation

NationalLegislation

EURequirements for year-end and half-year reporting,audit, risk management, and corporate governance

German LawRequirements for year-end, half-year, and quarterlyreporting, audit, risk management, and corporategovernance (mostly based on EU requirements)SAP AG statutory German GAAP reporting = basis fordividends and taxSpecific disclosure requirements not covered by IFRSor US GAAPStandards and Interpretations by GASB (GermanAccounting Standards Board)

Frankfurt Stock ExchangeQuarterly reporting requirements defining certainminimum disclosures

National Legislation of SubsidiariesStatutory local GAAP reporting for most subsidiariesFurther reporting requirements for some subsidiaries

SECRequirements for year-end reporting and relatedcontrols, audit, and corporate governance

New York Stock ExchangeReport over deviations from NYSE CorporateGovernance Rules

© SAP 2009 / 12

Structure of IFRS Implementation ProjectSAP AG

Tasks to be accomplished1. Understand IFRS base knowledge available at SAP AG

Decision on use of external resources (Consulting Partner KPMG)Identification of differences between US-GAAP and IAS/IFRS

Preparation of IAS/IFRS Accounting PolicyTraining of relevant employees

2. TechnicalPreparation of IAS/IFRS chart of accounts

Set up of accounts/structuresDetermination of additional accounting objects to be posted as required for IFRS compliance

3. OrganizationalRollout to subsidiaries

Subproject 1: Know-how developmentSubproject 2: Technical preparationSubproject 3: Organizational Support

© SAP 2009 / 13

For Example SAP’s own IFRS ProjectLooked Like This …

Adoptionof IFRS

@

Provides guidance and trainingProvides posting infrastructurePerforms certain reconciliationpostings for all company codes

Share-based payments and relatedhedge entries

Collects data for disclosures (viaexpanded reporting package)Supports identification of IFRS/US GAAP differencesDecides accounting for major openitems

Provides guidance and trainingProvides posting infrastructurePerforms certain reconciliationpostings for all company codes

Share-based payments and relatedhedge entries

Collects data for disclosures (viaexpanded reporting package)Supports identification of IFRS/US GAAP differencesDecides accounting for major openitems

Corporate Financial ReportingCorporate Financial Reporting

Identify reconciling items (i.e.,differences IFRS/US GAAP)Perform all reconciliation postingsexcept those performed by CFRBring open issues to the attention ofregional IFRS SpecialistComplete expanded reportingpackage and provide certification onaccuracy and completeness ofreconciling entries and disclosuresSupport KPMG‘s audit

Identify reconciling items (i.e.,differences IFRS/US GAAP)Perform all reconciliation postingsexcept those performed by CFRBring open issues to the attention ofregional IFRS SpecialistComplete expanded reportingpackage and provide certification onaccuracy and completeness ofreconciling entries and disclosuresSupport KPMG‘s audit

Collect all ambiguous issues fromindividual entities in the respectiveregionProvide guidance to solveambiguous issuesDiscuss complex issues with CFR(single point of contact in CFR foreach IFRS Specialist)

Collect all ambiguous issues fromindividual entities in the respectiveregionProvide guidance to solveambiguous issuesDiscuss complex issues with CFR(single point of contact in CFR foreach IFRS Specialist)

Audit– IFRS opening balance sheet– IFRS reconciliation 2006– IFRS reconciliation 2007 and

beyond– IFRS consolidated financial

statements 2007 and beyond

Audit– IFRS opening balance sheet– IFRS reconciliation 2006– IFRS reconciliation 2007 and

beyond– IFRS consolidated financial

statements 2007 and beyond

OrganizationPersonnel

ProcessesTechnology

Local SAP EntitiesLocal SAP Entities

Regional IFRS SpecialistsRegional IFRS Specialists Consulting Partner (KPMG)Consulting Partner (KPMG)

© SAP 2009 / 14

Timeframe of the ProjectSAP AG

knowhow technical/IT organizational

HY1

2004HY2 HY1

2005HY2 HY1

2006HY2 HY1

2007HY2 HY1

2008HY2HY1

2003HY2

Implemen-tationApproach

Implemen-tationApproach

Decision onexternalsupport

Decision onexternalsupport

Identification of initial relevant differencesUS GAAP/IFRSIdentification of initial relevant differencesUS GAAP/IFRS

IFRSAccountingGuideline

IFRSAccountingGuideline

Prepare IFRS chart of accountsPrepare IFRS chart of accounts

Rollout of IFRSto subsidiaries(incl. training)

Rollout of IFRSto subsidiaries(incl. training)

2006 IFRSData forSAPGroup

2006 IFRSData forSAPGroup

2007 IFRSData forSAP Group

2007 IFRSData forSAP Group

Determine add.accountingobjects

Determine add.accountingobjects

2004/2005 IFRSData for SAPAustr.2004/2005 IFRSData for SAPAustr.

© SAP 2009 / 15





Agenda

© SAP 2009 / 16

2009 2011 2012 2013

Begin IFRS Project Planning and LocalImpact to Determine SAP Landscape

Solution Required

Prepare OpeningBalance Sheetunder IFRS rules

Dual ReportingPeriod Ends

IFRS Go-LiveDate

2014

Begin configurationLandscape for IFRSa. Transaction Layerb. Reporting Layer

SAP GeneralLedger MigrationCompleted 1st

Qtr 2010SAP GeneralLedgerValidation Periodcompleted byYear End

2010

UpgradeProject to SAPERP 6.0CompletedSAP GeneralLedgerMigrationProject

Dual Reporting Period Go-Live IFRSPossible SystemLandscapeOptimization (SLO)Projects to clearLocal GAAPIssues

SAP Field Services + Customer – SAP ERP Layer

Begin IFRSProject

Consulting/Audit Partner, Customer + SAP Field Services

Go-Live with IFRSas primary groupreporting standard

Perform consolidationreporting in both the localaccounting standard andthe IFRS systems

ReviewExistingconsolidationsand XBRLcapabilities

Adapt the currentor deploy a newconsolidationapplication forgroup reporting

Go-Live with newor updatedconsolidationcapabilities

SAP Field Services + Customer – Reporting/Analytical Layer

IFRS: Implementation Timeline –Overview Recommendations (US Timeline)

© SAP 2009 / 17

SAP Solution Portfolio for IFRS

SAP BusinessObjectsSAP BusinessObjects EPM and GRCSolutionsSAP BusinessObjects

SAP BusinessObjects Planning andConsolidation + IFRS Starter KitSAP BusinessObjects FinancialInformation ManagementSAP BusinessObjects XBRL Publishing byUBmatrix

SAP Business SuiteSAP Business Suite 7

SAP ERP 6.0 –– SAP ERP Financials– SAP General Ledger

– Parallel Ledgers– Asset Accounting– Etc.

SAP Business Suite solutions are already IFRS capableSAP BusinessObjects solutions can also play a key role in helping organizations transitionto IFRSWith the combination of SAP ERP and SAP BusinessObjects solutions —

SAP offers the most complete solution to support IFRS

© SAP 2009 / 18

Options for SAP General Ledger Configurationfor IFRS Adoption

Approaches available for multi-GAAP valuation within SAP ERP Financials

No additional functionalityplanned by SAPNot a recommend solution formost companies

Special Ledger

Most transparent approachIndependent set of booksFuture IFRS requirements moreeasily accommodated

Parallel Ledger

No additional functionalityplanned by SAPNot a Recommend Solution formost companies

Parallel Company Codes

Easiest to implementCan lead to unmanageable COAin SAP General Ledger

Account Based

SAP GeneralLedger

ClassicApproach

Current recommended configuration approaches for SAP General Ledger

© SAP 2009 / 19

Parallel Company Codes and Special LedgerApproaches (Not Recommended)

Neither approach is the recommended solution for today’s environmentsThese approach options were recommended prior to the availabilityof the SAP General Ledger and the capabilities added by SAP BusinessObjects

In some cases these options may still be workable in special cases, but onlyafter a through review of the other recommended options with yourconsulting/audit partner and SAP

Parallel Company Codes

Special Ledgers

© SAP 2009 / 20

Parallel Ledger ApproachApplies to SAP General Ledger Only

How it WorksProvides IFRS and Local Accounting Standard reporting from multi-ledgers

Can be configured to meet both reporting requirements from the first go-live dateUtilizes the best features of the SAP General Ledger

Document SplittingSegment ReportingEtc.

Recommended option of complex installationsLarge differences between IFRS reporting standards and the current legal reportingstandard

Feeds properly formatted IFRS data directly into the Reporting and Analyticslayer

Simplifies reporting and requires little manual adjustment after consolidationsImplementation from the beginning of fiscal year

Matches IFRS time line

Parallel Ledger Configuration is recommended whereSegment reporting is requiredIncreasing the number of SAP General Ledger accounts is not desirableComplete set of separate legal reporting books is preferredDifferent fiscal year is needed for different legal sets of books

© SAP 2009 / 21

Account Based ApproachCan Be Used Across All General Ledger Versions

Common

Accounts

Pure IFRS

Accounts

PureLocal GAAP

Accounts

Account Solution is recommended whereRelatively few valuation differences exist between IFRS and local GAAPNo issue with an increased number of General Ledger accountsStandard reporting is usedDifferent fiscal years are not required

How it worksUses single ledger for all posting

Could be the Leading Ledger for SAP General Ledger

Accounts are “grouped” according to legal reporting requirementsExample

300000 to 400000 Operational Chart500000 to 550000 IFRS600000 to 650000 Local GAAP

Each group of accounts must be in balanceRequires extra care to ensure correct account determinationAnd the establishment of a coding handbook.

IFRS Financial Statements report using common accounts and “pure” IFRSaccounts together

Red Oval in diagram

© SAP 2009 / 22





Agenda

© SAP 2009 / 23

2009 2011 2012 2013

Begin IFRS Project Planning and LocalImpact to Determine SAP Landscape

Solution Required

Prepare OpeningBalance Sheetunder IFRS rules

Dual ReportingPeriod Ends

IFRS Go-LiveDate

2014

Begin configurationLandscape for IFRSa. Transaction Layerb. Reporting Layer

SAP GeneralLedger MigrationCompleted 1st

Qtr 2010SAP GeneralLedgerValidation Periodcompleted byYear End

2010

UpgradeProject to SAPERP 6.0CompletedSAP GeneralLedgerMigrationProject

Dual Reporting Period Go-Live IFRSPossible SystemLandscapeOptimization (SLO)Projects to clearLocal GAAPIssues

SAP Field Services + Customer – SAP ERP Layer

Begin IFRSProject

Consulting/Audit Partner, Customer + SAP Field Services

Go-Live with IFRSas primary groupreporting standard

Perform consolidationreporting in both the localaccounting standard andthe IFRS systems

ReviewExistingconsolidationsand XBRLcapabilities

Adapt the currentor deploy a newconsolidationapplication forgroup reporting

Go-Live with newor updatedconsolidationcapabilities

SAP Field Services + Customer – Reporting/Analytical Layer

IFRS: Implementation Timeline –Focused on SAP ERP Layer

© SAP 2009 / 24

Parallel Ledger ApproachScenario 1 – Net New Customers

Net New Customers are defined as:SAP ERP go-live date prior to January 2012SAP General Ledger planned or activeParallel Ledgers favored option for General Ledger configuration

Basic Considerations leading to Parallel Ledger ApproachIFRS knowledge base level

Consulting/Audit Partner engagementSAP Field Services

Go-live dateIn futureAlready live on SAP ERP release

Current landscape complexityConsolidation of multi-instances?Upgrades and General Ledger migration

Major differences exist between current Local Accounting Standard* and IFRS reporting requirements

•*Local Accounting Standard is the legal reporting standard.

• In the following examples it will be referred to as US GAAP.

© SAP 2009 / 25

Parallel Ledger Approachfor Net New SAP ERP Customers – Scenario 1/Option 1

Option 1 Parallel Ledgers – Leading Ledger and Asset Area 01 both set to yourLocal Accounting Standard (US GAAP)

Considerations for this approachSAP General Ledger is already live with:

Leading Ledger (LL) set to your Local Accounting Standard (US GAAP)Asset Area 01 tied to the Leading Ledger and configured for the Local AccountingStandard (US GAAP)

SAP ERP go-live date in the near futureCurrent plans call for LL and Asset Area Valuation Area 01 to be set to the LocalAccounting Standard (US GAAP)

Detailed knowledge of IFRS impact is NOT available at presentGo-live date in near future or already passed– No time to fully understand the impact of IFRS reporting requirements when compared

to the current reporting standardsAdditional Note

With this approach you may want to consider the set up of additional table groups for thenon-leading ledgers

© SAP 2009 / 26

Parallel Ledger Approachfor Net New SAP ERP Customers – Scenario 1

Configuration Design: Scenario1/Option 1

LeadingLedger

Asset ValuationArea 01

Set to USGAAP

Set to USGAAP

Planned configuration for IFRS Reporting Standard After 2014


LeadingLedger

Set to IFRSStandards


Non-LeadingLedger(s)

Used for LocalReporting Requirements



Current Configuration: Local Accounting Standards (US GAAP)

© SAP 2009 / 27


Configuration Design: Scenario1/Option 1Dual Reporting Period: 2012 – 2014

LeadingLedger

(0L)

Asset ValuationArea(01)

Set to USGAAP

Set to USGAAP

Used for IFRS Reporting

NewAsset Valuation

Area(Z1)

NewNon-Leading

Ledger(NL)





Used for US GAAP Reporting



© SAP 2009 / 28


Configuration Design: Scenario1/Option 1After 2014 IFRS Corporate Book of Record

LeadingLedger

(0L)


Set toIFRS

Set toIFRS

Used for Local Accounting Standard Reporting (US GAAP)

Asset ValuationArea(Z2)

Non-LeadingLedger

(NL)

Set to LocalAccounting Standards

Set to LocalAccounting Standards

OtherNon-Leading

Ledger(s)


As Required


OtherNon-Leading

Ledger(s)


As Required

© SAP 2009 / 29


Option 1 – Use Parallel Ledgers with Leading Ledger 0L &Asset Area 01 set to US GAAPHow do you get there?

1. On initial configuration ensure LL and Asset 01 are set to Local Accounting Standard (US GAAP)2. Prior to dual reporting period (2012)

Engage with your Consulting/Audit Partner– Determine IFRS impactEngage with SAP Services– Determine any landscape or application issues

3. Set up new Asset Area (Z1)Set to IFRS standards

4. Set up a new Non-Leading Ledger (NL)Use General Ledger migration scenario 7Also set to reporting IFRS standards

5. Dual Period Reporting (2012-2014)Use Leading Ledger (0L) and Asset Area 01 for US GAAPUse new non-leading ledger (NL) and Asset Area (Z1) for IFRS

6. End of Dual Reporting Period (2014)Change Leading Ledger to IFRS– Use extra open periods in LL to book “Delta” values and convert open balances to IFRS valuesChange Asset Area 01 to IFRS– SLO Project required to covert Asset Area 01 from US GAAP to IFRS

© SAP 2009 / 30


Option 2 Parallel Ledgers – Leading Ledger and Asset Area 01 both used forIFRS Reporting and a Non-Leading Ledger

Considerations for this ApproachSAP General Ledger is NOT live at present:

Leading Ledger (LL) can be set to IFRS reporting standardsAsset Area 01 can be configured to IFRS

ERP go-live date is some time prior to the dual reporting period (2012--2014)Current Plans call for LL and Asset Area Valuation Area 01 to be set to IFRS

Additional non-leading ledgers and Asset Valuation Areas will be utilized for other reportingrequirements

General IFRS knowledge is available prior to go live dateConsulting/Audit Partner and SAP can be engaged for IFRS project prior to go-live dateLocal IFRS team of experts is available to engage

Additional NoteWith this approach you may want to consider the set up of additional table groups for the non-leadingledgersNo SLO project would be mandatory with Option 2

© SAP 2009 / 31

Parallel Ledger Approachfor Net New SAP ERP Customers – Scenario 1/Option 2 (cont.)


LeadingLedger


Set toIFRS

Set toIFRS

Configuration for IFRS Reporting Standard After 2014


Non-LeadingLedger

Set to USGAAP

Set to USGAAP


Used for otherReporting Requirements

Planned Configuration at go-live date: IFRS and Local Accounting Standard(US GAAP)


Used for otherReporting Requirements

© SAP 2009 / 32



LeadingLedger

(0L)


Set toIFRS

Set toIFRS

Used for Local Accounting Standard (US GAAP)


Non-LeadingLedger

(NL)

Set to USGAAP

Set to USGAAP






Dual Reporting Period (2012 – 2014)

© SAP 2009 / 33



LeadingLedger

(0L)


Set toIFRS

Set toIFRS

Used for Local Accounting Standard Reporting (US GAAP)


Non-LeadingLedger

(NL)

Set to USGAAP

Set to USGAAP

OtherNon-Leading

Ledger(s)


As Required


OtherNon-Leading

Ledger(s)


As Required

After 2014 Corporate Book of Record

© SAP 2009 / 34


Option 2 Parallel Ledgers– Use Parallel Ledgers with LeadingLedger/Asset Area 01 set to IFRS at go-live dateHow do you get there?

1. On initial configuration insure LL and Asset 01 are set to IFRS prior to go live:Engage with your Consulting/Audit Partner– Determine IFRS impactEngage with SAP Services– Determine any landscape or application issues

2. Prior to dual reporting period (2012)Prior to go-live date set up non-leading ledger for US GAAP reporting (NL)Also prior to go-live set up another Asset Valuation Area for US GAAP reporting tied to non-leading ledger (Z1)If completed after go-live date– Use Scenario 7 for new non-leading ledger– Set up Asset Area tied to non-leading ledger (Z1)

3. Dual Period Reporting (2012 – 2014)Use Leading Ledger (0L) and Asset Area 01 for IFRS reportingUse new non-leading ledger (NL) and Asset Area (Z1) for US GAAP reporting

4. End of Dual Reporting Period (2014)Continue as isClose down non-leading ledger and Asset Valuation area used for US GAAP– Optional

© SAP 2009 / 35

Account Based ApproachScenario 2

Common

Accounts

Pure IFRS

Accounts

PureLocal GAAP

Accounts

Account Solution is recommended whereRelatively few valuation differences exist between IFRS and local GAAPNo issue with an increased number of General Ledger accountsStandard reporting is usedDifferent fiscal years are not required

How it worksUses single ledger for all posting

Could be the Leading Ledger for SAP General Ledger

Accounts are “grouped” according to legal reporting requirementsExample

300000 to 400000 Operational Chart500000 to 550000 IFRS600000 to 650000 Local GAAP

Each group of accounts must be in balanceRequires extra care to ensure correct account determinationAnd the establishment of a coding handbook.

IFRS Financial Statements report using common accounts and “pure” IFRSaccounts together

Red Oval in diagram

© SAP 2009 / 36

Account Based ApproachScenario 2 – SAP ERP and SAP R/3 Customers

The Account Based Approach for IFRS reporting:Can be used by ALL General Ledger versions

SAP General Ledger (NewGL)Classic General Ledger (SAP R/3 version)

Should be used only when a a relatively small group of accounting differences will occur betweenthe current Accounting Standard and the IFRS standards

Key Point – IFRS standards vary by industry, country, and local requirements– Prior to the adoption of the Account Based approach a through investigation should be completed to

ensure this is the correct approachDoes not require the set up of additional ledgers

Both Local GAAP and IFRS data will be contained in single ledgerDoes require the “grouping” of specific accounts

Will not utilize one of the best features found within the SAP General Ledger– Parallel Ledger Accounting

– If in the future Parallel Ledger accounting will be required – a GL migration project will be requiredWill add more General Ledger Accounts to the Chart of Accounts

Reporting performance issue may result if too many GL numbers are addedAccount Based configuration will require Asset Valuation Area mapping to individual accountgroups

© SAP 2009 / 37

Account Based ApproachSAP ERP and SAP R/3 Customers – Scenario 2/Option 1

Account Based and the Operational Chart of AccountsLocal Accounting Standard (US GAAP) and IFRS reporting is accomplished by a combinationof the “operational” accounts and the specific account groups within the operation chart ofaccountsLack of IFRS knowledge and skills prevent the configuration of IFRS standards

Early or past go-live dateFew differences exist between current standard (US GAAP) and IFRS

Use of a single ledger for all reporting requirements is possibleAdditional Asset Valuation Areas will need to be configured for IFRS reporting

Specific account groups will be established and linked to these Asset Valuation AreasDuring the dual reporting period

Local account group + operational accounts will be used for Local Accounting Standard(US GAAP) ReportingIFRS account group + operational accounts will be used for IFRS reporting

At the end of the dual reporting period (2014)An SLO project will be required to configure Asset Valuation Area 01 to IFRSAn additional SLO project may be required to clean up chart of accounts

© SAP 2009 / 38

Account Based ApproachSAP ERP and SAP R/3 Customers – Scenario 2/Option 1Dual Reporting Period (2012 – 2014)

Report configuration is key requirement

1. Local GAAP reports require Common Accounts + specific group forLocal Accounts

2. IFRS reports require Common Accounts + IFRS specific accountsgroup

Common

Accounts

Pure IFRS

Accounts

PureLocal GAAP

Accounts

Single Ledger Contains 3 Account Groups1. Common Accounts to both Local GAAP and IFRS2. Accounts only used for IFRS3. Accounts only used for Local GAAP

Asset ValuationArea Z1 IFRS

Asset ValuationArea 01 Local GAAPSingle Ledger

© SAP 2009 / 39

Account Based ApproachSAP ERP and SAP R/3 Customers – Scenario 2/Option 1After Dual Reporting Period (2014)

Report configuration is key requirement



Common

Accounts

Pure IFRS

Accounts

PureLocal GAAP

Accounts


Asset ValuationArea 01 IFRS

Asset ValuationArea Z1 ???Single Ledger

Required:SLO project to CopyAsset Area Z1Historyto Asset Area 01

© SAP 2009 / 40


Option 1 Account Based – Single ledger with Asset Area 01 set to LocalGAAP ReportingHow do you get there?

1. Prior to dual reporting period or go live date (2012)Engage with your Consulting/Audit Partner– Determine IFRS impact and any differences between the current Accounting Standard and the IFRS requirementsEngage with SAP Services– Determine any landscape or application issues

2. If the account based approach is feasible then ensure that Asset Area 01 is set to the Local Accounting StandardAlso set up additional Asset Valuation areas as required for other standards such as IFRS

3. Set up proper account grouping for example:300000 – 400000 for common accounts500000 – 500500 for IFRS specific accounts600000 – 600500 for Local GAAP specific accounts

4. For dual reporting period format legal accounting reports to insure reporting data is selected from correctaccount groups (2012 – 2014)5. End of the dual reporting period (2014)

SLO project required to switch Asset Area 01 to IFRS reporting standardReformat legal reports to read data from Asset Area 01SLO Account clean up project (Suggested)

6. Additional NoteAn additional GL migration project would be required if parallel ledger features are desired at a later date

© SAP 2009 / 41


Account Based and the Operational Chart of AccountsLocal GAAP Accounting reporting is accomplished by a combination of the “operational”accounts and the specific account group configured for specific US GAAP reportingIFRS knowledge and skills are available which will allow configuration of IFRS standards inAsset Area 01.

Early go prior to dual reporting period (2012 – 2014)Few differences between Local GAAP and IFRS allow for single ledger based reportingAdditional Asset Valuation Areas will be configured for Local GAAP (US GAAP) reporting

Specific account groups will be established and linked to these Asset Valuation AreasDuring dual reporting period

IFRS account group + operational accounts will be used for IFRS reportingLocal account group + operational accounts will be used for Local GAAP Reporting

At the end of the dual reporting period (2014)SLO project may be required to clean up chart of accounts (Suggested)

© SAP 2009 / 42

Account Based ApproachSAP ERP and SAP R/3 Customers – Scenario 2/Option 2Dual Reporting Period (2012 – 2014)

Report Configuration is key Requirement

1. Local GAAP reports require Common Accounts + specific accountgroup for Local Accounts

2. IFRS reports require Common Accounts + IFRS specific accountgroup

Common

Accounts

Pure IFRS

Accounts

PureLocal GAAP

Accounts



Asset ValuationArea Z1 US GAAPSingle Ledger

© SAP 2009 / 43

Account Based ApproachERP & R/3 Customers – Scenario 2/Option 2After Dual Reporting Period (2014)

Report Configuration is key Requirement



Common

Accounts

Pure IFRS

Accounts

PureLocal GAAP

Accounts



Asset ValuationArea Z1 US GAAPSingle Ledger

SLO Project toClean up Chart of AccountsAnd Asset Area Z1Optional

© SAP 2009 / 44


Option 2 Account Based – Single ledger with Asset Area 01 set to IFRSReporting Standard

How do you get there?1. Prior to dual reporting period or go live date (2012)

Engage with your Consulting/Audit Partner– Determine IFRS impact and any differences between the current Accounting Standard and the IFRS requirementsEngage with SAP Services– Determine any landscape or application issues

2. If the account based approach is feasible then insure that Asset Area 01 is set to IFRS AccountingSet up any additional Asset Areas as required

3. Set up proper account grouping for example:300000 – 400000 for common accounts500000 – 500500 for IFRS specific accounts600000 – 600500 for Local GAAP specific accounts

4. For dual reporting period format legal accounting reports to insure reporting data is selected from correctaccount groups (2012 – 2014)5. End of the dual reporting period (2014)

Reformat legal reports to read data from Asset Area 01SLO Account clean up project (Suggested)

6. Additional NoteAn additional GL migration project would be required if parallel ledger features are desired at a later date

© SAP 2009 / 46

Typical Questions

Is there a single best solution for IFRS?No, sorry

The best solution for your company will be the result of a thorough review of your current statusand the overall impact on your company when adapting to IFRS

Does SAP consider the implementation of IFRS a significant project?Yes, we do

The complexity of your project will be driven by your industry, company, and even countryYour current landscape status will also play a role in the complexity of your specific project

System upgradesSAP General Ledger migration projectsSLO projects

Your IFRS project will require input and guidance fromYour consulting partnerSAP ServicesYou own internal experts

Some Frequently Asked QuestionsSAP’s View of IFRS

© SAP 2009 / 47

Some Frequently Asked QuestionsSAP’s View of IFRS (cont.)

What is the first step I should take to begin this IFRS project?SAP would suggest you contact both your consulting partner and SAP for guidance and preliminaryplanning

Typical Questions

What type of support can I expect from SAP during this project?SAP will provide application support for our products

Basically we can help with basic configuration/consolidations and reporting helpFor correct interpretation of the IFRS rules and guidelines it is best you work with your consultingpartner

© SAP 2009 / 49

SAP Resources

You can find further information about SAP’s and our Partners approach to IFRS:

SAP’s Community Network site devoted to IFRS issueshttps://www.sdn.sap.com/irj/bpx/ifrs

SAP Demo Pods – Show FloorSAP ERP Financials Demo Pods– Gary Fullmer

– [email protected] BusinessObjects Demo Pod– Philip Mugglestone

– [email protected] Booths – Show Floor

Other IFRS Presentations at Las VegasFollow the SAP roadmap to IFRS compliance– Friday 11:30 to 1:00 (Repeat Session)

– Gary Fullmer – SAP LabsWhy and how to prepare for IFRS– Thursday 8:30 to 9:45

– John Steele – Deloitte

https://www.sdn.sap.com/irj/bpx/ifrs

mailto:[email protected]


© SAP 2009 / 50

SAP Contact Slide

SAP ERP Financials — Gary Fullmer [email protected]

Pete Graham [email protected]

SAP BusinessObjects — Philip Mugglestone [email protected]

SAP Field Services — Joe Svoboda [email protected]

Mark Lombard [email protected]

SAP SLO Services — Enis Akgerman [email protected]







© SAP 2009 / 51

7 Key Points to Take Home

You should consider IFRS as a major projectAs with any project, early planning and the complete understanding of the requirements willlead to a successful outcomeBegin planning now! 2014 is not that far awayYour IFRS project will require engagement with you Consulting Partners, SAP, and your ownin house expertsThere is no “sliver bullet” or single standard solution for IFRS adoptionPlan on making changes to your SAP ERP landscape at some time (now or in the future)Best plan of all is to get as much knowledge about IFRS and its impact on your local systems

Save time and money with early investigation

© SAP 2009 / 52

Thank you!

Gary Fullmer

[email protected]

How to contact me: How to contact meHow to contact me

Mark [email protected]



© SAP 2009 / 54

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