Post on 20-May-2020
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Fourth Quarter Accounting & Tax UpdateJanuary 9, 2018
Welcome
Trevor Hammond
Partner, Audit
Agenda— ASC corporate disclosure
— IFRS reporting for year end
— US tax reform
— Tax year end hot topics
— Digital transformation of finance
— Question & answer
ASC corporate disclosure
Kim Isotti
Senior Manager, Audit
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ASC Corporate Finance Disclosure Report
Continuous disclosure review outcomes
ASC Corporate Finance Disclosure Report, 2017
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ASC Corporate Finance Disclosure Report
Continuous disclosure review
Climate change related disclosures
—Lack of familiarity with environmental reporting guidance
—Requirement to disclose information regarding:
—Material environmental risks
—Risk oversight and management
Gender diversity
—Compliance regarding disclosure of:
—Policies and consideration of the representation of women
—Number of women in executive officer positions
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ASC Corporate Finance Disclosure Report
Continuous disclosure review (continued)
CEO and CFO certifications
—Venture reporting issuer certifications
—Non venture reporting issuer certifications
Conditional agreements and letters of intent
—Insufficient information
—Deficient forward looking information (FLI) disclosure
—Progress updates and milestones
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ASC Corporate Finance Disclosure Report
Continuous disclosure review (continued)
Information circulars
—Insufficient disclosures in respect of significant acquisition or restructuring transaction
Statement of cash flows
—Presentation and misclassification issues
Insider reporting requirements
—Deficiencies in maintaining System for Electronic Disclosure by Insiders (SEDI) records
Pro forma information
—Presentation in other filings
—Operating statements
—Pro forma oil and gas information
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ASC Corporate Finance Disclosure Report
Offering documents
Earnings coverage
—Errors in the calculation of earnings coverage ratios
—Disclosure when earnings coverage ratio is less than one-to-one
Non-GAAP financial measures
—Increased prevalence of non-GAAP measures
—Omission of required disclosures
Third party information
—Missing, vague or inaccurate references
—Inappropriate disclaimers
IFRS reporting for year end
Reinier Deurwaarder
Partner, Audit
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IFRS reporting for year end
Disclosures of changes in financial liabilities
—Disclose Cash and Non-cash Changes
Recognition of DTA for unrealized losses
—Clarification of future taxable profit
IFRS 9 / 15 / 16 disclosures
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IFRS reporting in 2018 and 2019
2018
IFRS 9 financial instruments
—Impairment
—Debt modification
IFRS 15 Revenue from contracts with customers
—Follow the model
—Specific guidance
—Analyze contracts
Prepayments in a foreign currency (IFRIC 22)
2019
—IFRS 16 leases
—Uncertainty over income taxes (IFRIC 23)
US tax reform
Jim Rowling
Partner, Tax
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2018 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.
The A possible path to tax reform
Ways and Means
Chairman releases mark
11/03/17
Markup by Ways and
Means Committee
11/06/17
Ways and
Means
approves
bill
11/09/17House votes and passes 11/16/17
Senate
Finance
Chairman
releases
mark
11/10/17
Markup by Senate
Finance Committee
11/14/17
Senate votes and passes by
simple majority through
“budget reconciliation”
12/02/17
Resolve differences
and send back to House
and Senate for vote on
identical legislation
Final bill sent to
President Trump
for signature
Treasury and Internal
Revenue Service begin
process of implementing
the new law
HouseBill introduced
11/2/17
Senate White House
Joint
Conference
Senate Finance Committee approves bill11/16/17
Senate Budget Committee votes to send bill to Senate floor11/28/17
Markup
11/9/17
You are here
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Key provisions – Business
Provision Conference Agreement
Corporate rate 21% effective for taxable years beginning after 12/31/17. Special rules for fiscal year filers. Permanent, unlike rates for individuals.
Cost recovery 100% expensing for investments in depreciable property other than real property or certain utility property and certain businesses with floor plan indebtedness; applies to both new and used property (used property cannot be acquired from a related party); applies to investments after September 27, 2017 and before January 1, 2023; phase-out 2023-2026 (80%, 60%, 40%, 20%).
Real property cost recovery No provision. Buildings remain subject to MACRS.
Interest expense Disallow net business interest deductions (whether paid to related or unrelated, domestic or foreign person) in excess of 30% of “adjusted taxable income”; adjusted taxable income generally is EBITDA from 2018-2021 and EBIT thereafter; would not apply to small businesses, real estate businesses, utilities, and floor plan indebtedness; disallowed interest carried forward indefinitely(not 5 years as proposed) and no excess limitation carryforward.
Net operating losses (NOLs) NOLs arising in tax years beginning after 12/31/17 limited to 80% of taxable income; generally no carrybacks and indefinite carryforward (no inflation adjustment) for net operating losses arising in tax years ending after 12/31/2017. Provides incentive to accelerate deductions into 2017.
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Key provisions – Business (continued)
Provision Conference Agreement
Corporate AMT Repeal corporate AMT; credit carryforwards partially refundable for years 2018, 2019 and 2020 (limited to 50% of excess credits over regular tax liability); remainder fully refundable for 2021.
Research activities No changes to research credit; Sec. 174 costs generally amortized over 60 months beginning in 2026.
Like-kind exchanges Non-recognition is eliminated for exchanges of property other than real property.
Section 199 Repealed beginning 2018.
Business entertainment expenses No deduction for entertainment, amusement or recreation. Retains 50% deduction for food and beverages associated with a trade or business.
Dividends Received Deductions Reduce 80% DRD to 65%; and 70% DRD to 50%.
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Key provisions – International
Provision Conference Agreement
Participation exemption system Create a 100% exemption for dividends received from 10% owned foreign corporations. Doesnot apply to dividends paid by a PFIC. Furthermore, such earnings cannot be subpart F income, nor subject to minimum tax discussed below.
Mandatory repatriation of existing earnings and profits (E&P)
Foreign undistributed and untaxed E&P accumulated post-1986 (not inherent gains) while an SFC under old system deemed repatriated; rate of 15.5% for cash/cash equivalents and 8% for illiquid assets; the tax is payable over 8 years (backloaded: 8% each of first 5 years, then 15%, 20% and 25%); E&P determined as of November 2 or December 31 (whichever is higher). Can use FTCs to offset tax.
Current tax on certain foreign income (aka “mintax”)
Create a current tax on global intangible low-taxed income (GILTI) – i.e., non-routine income; taxed amount is generally CFC income in excess of a 10% return on basis in business property; partial FTC offset permitted (no carryforward); Domestic corporations are allowed 50% (37.5% after December 31, 2025) deduction for GILTI amount and a 37.5% (21.875% after December 31, 2025) deduction for income deemed derived from foreign intangibles (FDII).
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Key provisions – International (continued)
Provision Conference Agreement
Related-party transaction base erosion measures
Create a base erosion anti-abuse tax (BEAT) that functions as an alternative minimum tax by adding back related party deductions (not including COGS) and certain credits; applies to taxpayers with annual domestic gross receipts in excess of $500 million.
Limitation of interest for domestic corporations part of an international financing reporting group
No provision.
Section 956 No provision to repeal; therefore, remains.
CFC look-through rule No provision to make permanent; therefore, will sunset.
Other Base Erosion Measures Limits on income shifting through intangible property transfers, limitation on amounts paid through hybrid transactions/entities (including REPOs), others.
Tax year end hot topics
Les Der
Senior Manager, Tax
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Tax year end hot topics
US tax reform tax accounting implications
Provision Tax accounting implications
Corporate rate — Re-measure deferred taxes as of the enactment date and recognize the change as a discrete item
— Consider backwards tracing implications under International Financial Reporting Standards (IFRS)
— Scheduling may be necessary to appropriately measure deferred tax balances
Mandatory repatriation of existing earnings and profits (E&P)
— Deemed repatriation for controlled foreign corporations (CFCs) may create a tax liability that is not a deferred tax, including current / non-current implications
— Continue to assess ability to assert indefinite reinvestment of their accumulated undistributed earnings to avoid recognition of a deferred tax liability
Participation exemption system
— Consider whether dividend income is a source of foreign income to support realizability of deferred tax assets for foreign tax credits (FTCs)
— Consider indefinite reversal assertion for undistributed earnings
Current tax on certain foreign income (aka “minitax”)
— Expansion of current taxes on certain foreign income and deferred tax implications
— Treatment of “special deductions”
Related-party transaction base erosion measures
— BEAT appears to operate like a parallel income tax system; companies may need to determine which income tax system they expect to be in to identify and measure deferred taxes (i.e. scheduling implications)
— Accounting for the BEAT may ultimately be operationally challenging
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Tax year end hot topics
US tax reform tax accounting implications (continued)
Provision Tax accounting implications
Cost recovery — 100% expensing creates new taxable temporary differences
— Consider whether 100% expensing puts certain companies in a loss position that generates NOL carry forward balances that require analysis of recoverability
Interest expense — Consider limitations on using disallowed interest carry forwards, including ordering rules
— Overall unrecognized tax benefit or valuation allowance assessment
Net operating losses (NOLs)
— Annual limitation may result in changes to the unrecognized tax benefit or valuation allowance assessment
— Reschedule reversals of temporary differences because reversals will support only 80% of a NOL carry forward
— Unlimited carry forward period may result in changes to the unrecognized tax benefit (or valuation allowance) assessment
— Elimination of ability to carry back NOL may result in changes to the unrecognized tax benefit (or valuation allowance) assessment
Corporate alternative minimum tax (AMT)
— Transforms the deferred tax asset for existing AMT credit carry forwards into a tax receivable
— Determine classification as current or non-current
— Release of unrecognized tax benefits (or valuation allowances) on existing AMT credit carry forwards
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Tax year end hot topics
Canadian snapshot of general corporate rates
— British Columbia increased the province’s general corporate income tax rate to 12% (from 11%) effective January 1, 2018
— Saskatchewan decreased the province’s general corporate income tax rate to 11.5%, effective July 1, 2017. The rate will return to 12%, effective January 1, 2018
— Quebec gradually reduced the general corporate income tax rate beginning in 2017. The rate is 11.8% in 2017, and will decrease to 11.7% in 2018, 11.6% in 2019 and 11.5% in 2020. The rate reductions are effective January 1 of each year from 2017 to 2020
— Yukon decreased the province’s general corporate income tax rate to 12% (from 15%), effective July 1, 2017
Tax Rates for Active Business Income Earned by a General Corporation Substantively Enacted as of December 31, 2017
2017 2018 and beyond
Federal rate 15.0% 15.0%
Provincial rates
British Columbia 11.0% 12.0%
Alberta 12.0% 12.0%
Saskatchewan 12.0/11.5% 12.0%
Manitoba 12.0% 12.0%
Ontario 11.5% 11.5%
Quebec 11.8% 11.7/11.6/11.5%
New Brunswick 14.0% 14.0%
Nova Scotia 16.0% 16.0%
Prince Edward Island 16.0% 16.0%
Newfoundland and Labrador 15.0% 15.0%
Territorial rates
Yukon 15.0/12.0% 12.0%
Northwest Territories 11.5% 11.5%
Nunavut 12.0% 12.0%
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Tax year end hot topics
Bill Date “substantively
enacted” under ASPE / IFRS
Date “enacted” under
US GAAP
Link
Federal Bill C-63 October 27, 2017 December 14, 2017 2017 Federal Budget Bill #2 Receives Royal Assent
Status of Federal legislation
Notable domestic measures include:
—Introduce an elective mark-to-market regime for derivatives held on income account
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Tax year end hot topics
Bill Date “substantively enacted” under ASPE / IFRS
Date “enacted” under US GAAP
Link
British Columbia Bill 2 February 21, 2017 / October 26, 2017
November 2, 2017 Third Reading for British Columbia Budget Update Bill
Saskatchewan Bill 84 November 6, 2017 December 7, 2017 Saskatchewan Corporate Tax Bill Receives First Reading
Manitoba Bill 36 May 25, 2017 November 10, 2017 Highlights of the 2017 Manitoba Budgets
Ontario Bill 177 November 14, 2017 December 14, 2017 Ontario Drops Small Business Rate for 2018
Quebec Bill 146 November 9, 2017 December 7, 2017 Highlights of the 2017-2017 Quebec Budget
New Brunswick Bill 23 November 14, 2017 December 20, 2017 New Brunswick Drops Small Business Tax Rate for 2018
Nova Scotia Bill 39 October 11, 2017 October 26, 2017 Nova Scotia Budget Bill Receives First Reading
Status of Provincial legislation
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Tax year end hot topics
Voluntary Disclosure Program (VDP)
Overview
— The CRA has extended the deadline to access the current VDP before new changes take effect
— New deadline of February 28, 2018 to file under the current rules
— Overall new VDP to be effective March 1, 2018 including the limited VDP
Large corporations
— Corporations with gross revenue in excess of $250 million in at least two of their last five taxation years and any related entities will generally be considered under the new VDP’s limited program (i.e. relief from negligence penalties but no interest)
No-name disclosures
— The VDP program will no longer allow taxpayers to make a no-name disclosure for income tax and GST / HST purposes
— Taxpayer who applies under the current VDP on a no-name basis will be required to disclose their name before the new regime takes effect on March 1, 2018 or within 90 days of the date the CRA receives the disclosure application, whichever is earlier
CRA knowledge of non-compliance
— No longer allow taxpayers to access the new VDP where the CRA has already received information about their potential involvement in tax non-compliance
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Tax year end hot topics
Voluntary Disclosure Program (VDP) (continued)
Missing information
— The CRA is requesting taxpayers who cannot submit all information or documentation up front with its VDP application to include a written request for an additional specified period of time for any outstanding information
— Request is made at time of the submission of the application
Transfer pricing
— Applications relating to transfer pricing are not eligible for the VDP
— The CRA has clarified that such matters will be referred to the Transfer Pricing Review Committee for their consideration under the fairness provisions
GST / HST and other indirect taxes
— In the final guidelines, CRA has reduced the number of years for which the taxpayer must disclose all inaccurate and incomplete information under the General Program to four calendar years
— For VDP under Category 3, final guidelines maintain requirement that the related information must be provided for “all relevant years”
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Tax year end hot topics
Interest and penalties related to income tax
No accounting policy choice in accounting for interest or a penalty related to income tax
Entity is required to:
— Consider whether the amount payable or receivable for interest or penalties meets definition of an income tax
— If it does, apply IAS 12 to that amount
— If it does not, apply IAS 37 to that amount
Actions to consider
— Consider whether tax laws in the jurisdiction and other facts and circumstances indicate that this amount is based on taxable profit
— Consider whether conclusion reached is consistent with the current accounting policy
— Changes in recognition and measurement, and presentation should be applied retrospectively in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
Digital transformation of finance
Narmin Vasanji
Partner,
Financial Management
Aman Bagga
Senior Manager,
Management Consulting
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Agenda
—CEO’s perspective
—Finance digital transformation
—Robotic process automation (RPA) use cases & benefits
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View from the top – CEO agenda / priorities
US CEO Outlook 2017 survey
57%One out of three CEOs believe that their sector
will see a major disruption in the coming three
years as a result of technological innovation.
Areas of
greatest
investment
in technology
expected in
three years
25% Greater speed to market
22% Digitization of the business
21% Becoming more data-driven
21% Building public trust
20% Implementing disruptive technology
Digital and sensory concerns
say their
organizations do not
have the sensory
capabilities and
innovative processes
to respond to rapid
disruption
are
concerned about
integrating cognitive
processes and
artificial intelligence
say they
are not leveraging
digital as a means to
connect to their
customers
effectively
61% 45%
Top five strategic priorities in next three years
To disrupt is to exist
Time for a reboot?
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What CEOs expect of CFOs
“The Regulatory
environment will have
the most influence on
the future role of the
CFO; 61% of CEOs
see it as an
opportunity to derive
competitive
advantage”
“70% of CEOs say
technology will have
the greatest effect on
the future role of the
CFO, yet less than half
think they’re good at
leveraging new tech”
“85% of CEOs say
applying financial data
to achieve profitable
growth is the greatest
strategic value a CFO
can bring to an
organization”
“97% of CEOs say
attracting and
retaining top finance
talent is the most
important contributing
factor to improve the
finance function”
“Almost 50% of CEOs
worldwide list global
experience as the
most important
attribute a CFO can
possess”
Big Data Tech Savvy Data Analyst People Skills Global Reach
Source: 2015 KPMG Global CEO Survey 'The view from the top.'
Digital Finance
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The digital wave journey
The Pivotal Perspective
Selection, implementation, and
integration of large scale technology
products and platforms that deliver
ROI such as SAP, Oracle, Workday,
Service Now, Appian and more play
a pivotal role.Over the last five years, our
customers have begun laying the
foundations necessary for
enterprise mobility including BYOD,
MDM, federated security, remote
access, virtualization and enterprise
app stores.
The Age of the Customer has
ushered in the Age of the
Employee increasing demand for
consumer grade digital
experiences the requires
understanding employee needs,
motivations and expectations. New systems of record, enterprise
infrastructure, and consumer grade
experiences aligned to the business,
defined by humanity and refined
through analytics creates a new level
of digitization.
Market and technology pressures
are pushing IT to restructure their
organizations, governance and
technology architectures to enable
this digitization through a
rationalization of enterprise systems
and processes.
Digital transformation, innovation and
acceleration requires a cohesive
business-driven STRATEGY, new
TARGET OPERATING MODELS, and
people centric business processes.
Source: KPMG USA
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Digital transformation of finance – CFO response
Agenda in response to operating model disruption:
Leading finance organizations have developed an agenda to deal with disruption.
Extreme
automation
Integrating and combining:
• Cloud technologies/apps
• Robotics
• Artificial intelligence
• Blockchain
• Mobile
Insights &
analysis
New insights through:
• Descriptive and diagnostic
analytics
• Predictive and prescriptive
analytics
• Integrated business
plans
• Decision support
• Business partnering
Organizational
simplification
Changing way of work:
• Less people
• Less hierarchy
• Fewer locations
Skills &
talent
Changing requirements:
• Both strategy and finance
skills
• Process and control leaders
• Relationship and
collaboration
Innovation enablementIncreasing role in innovation
• Fundamental economics behind disruption
• Approaching disruption at the organizational level
• Maintaining an innovation portfolio
• Disciplined innovation process and structure
Agenda in response to business model disruption:
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Extreme automation
The finance technology ecosystem will continue to evolve and be integrated.
Mobile Finance will be delivered real-time, custom insights via
new mobile interfaces thereby driving accelerated decision
making capabilities, allowing finance to positively influence
business outcomes.
Machine learningAdaptive technologies will radically change the work that
finance does through the use of smart algorithms that can
be leveraged to accomplish activities and tasks.
Data managementData management will no longer be an aggregation of
performance data; finance will lead data strategy utilizing
new data sources (internal and external) to drive deeper
prescriptive insights.
BlockchainBlockchain will accelerate transaction recognition and
provide enhanced security, lesser storage requirements,
and shorter delivery cycle times; integration with cognitive
technologies will result in extreme automation.
RoboticsRobotic Process Automation (RPA) will drive “extreme
automation” within rules-based finance processes
resulting in greater capacity for value-added activities.
Natural language processingNLP will provide finance with unconstrained, real-time
information accessibility, beyond just the numbers.
Cloud ERP, EPM and BICloud technologies will give finance the ability to select
best-in-class application solutions, real-time data
accessibility, and business partnering capabilities.
CognitiveCognitive technologies will advance automation past
execution, through the ability to reason and infer trends
and patterns from both structured and unstructured data.
RPA Use Cases
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Basic automation vs. robotics process automationRobotics Process Automation -
Software bots (algorithms) operating and orchestrating other software
applications
Basic Automation - ERP, point solutions, custom scripts or macros
Rules configured at the outset,
limited customization capabilities
post-implementation (hard coded)
Past approvals data storage and
archiving
Additional components and
applications require integration to
work in synch
Considerable IT infrastructure and
costs required for implementation and
integration
Lengthy implementation months,
quarters
Flexible and faster performance
Software bots are continuously
trained by their users, throughout
the VAP process
Software bots collect data from
the approval process/ past
approvals
Software bots operate behind the
scenes, through the existing UI
Minimal IT infrastructure and
implementation/ integration costs
Swift implementation about 6-8
weeks
Virtual Approval Process (VAP) for Non Standard Deals – Adding rules for
mandatory review
Basic Automation
Robotics Process
Automation
Use Case Example
Option 1
Option 2
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RPA implementationUse case – Accounts ReceivablesUse issue/scenario: Automation solution was required to create an excel dashboard of Account Receivables – Ageing Analysis by Customer
Be
fo
re A
utom
atio
nA
fter A
utom
atio
n
Manual Steps: 08
Manual Steps: o* Non exception based
Mail the consolidated spread sheet to respected teams for further investigations
Filter the type code column to remove the process types which are no longer needed
Removing the Excel columns based on the requirement.
Filtering the Account reference column to remove the leading zeroes which are no longer needed and Sort it based on Ascending order.
Compare the Due amounts with the existing values. If match is found then update the spread sheet as matched else update as balance on account
Merge credit and debit columns and name it as Amount Due
Sort Account reference column based on the Ascending order
Receiving Excel files from Finance team
Receiving Excel files from Finance team
Open the Outlook,Search for the specific folder and extract the required file.
Filter the type code column as well as Account reference column which are no longer needed and sort it based on the Ascending order
Merge credit and debit columns and name it as Amount Due & compare the due amounts with the existing values and update the comments column with the status.
Fin
an
cia
l S
erv
ices
Time Per Record: 12-15 min
Time Per Record: 05-07 min
Removing the Excel columns based on the requirement.
Mail the consolidated spread sheet to respected teams for further investigations
Extracting the required file from the outlook.
39© 2018 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights
reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.
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Manual Steps: 12Request/month: 600
Headcount/location: 13 FTE Global: 700 FTE
Accuracy and improved productivity achieved by automating the Journal and Expense accrual entries
Manual Steps: 1
Receive Journal
Entry request
from business
Extract Journal Entry information
Applies 8 different validations to check data correctness
Calculate Journal Entries
Log in to SAP and enter t-code
Download approved file from SharePoint
Check for Approved requests
Reviews request and Approves
Check if journal above review threshold
Submit Journal Entry information to SharePoint for Approval
He
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Use case – Manual Journal Entries – Expense Accrual
Use issue/scenario: Automated solution was required to replace manual SAP Journal and Expense Accrual entries to eliminate manual errors and reduce
turnaround time for large volume of requests.
Upload data into SAP
Execute SAP query to Post entry
Receive Journal
Entry request
from business
Extract Journal Entry information
Applies 8 different validations to check data correctness
Calculate Journal Entries
Log in to SAP and enter t-code
Download approved file from SharePoint
Check for Approved requests
Reviews request and Approves
Submit Journal Entry information to SharePoint for Approval
Check if journal above review threshold
Upload data into SAP
Execute SAP query to Post entry
Update SharePoint with SAP upload details
Update SharePoint with SAP upload details
If the validation fails then rejects request and notifies requestor
RPA implementation
40© 2018 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights
reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.
What are the benefits?
Cost Efficiency
Estimates have found
that software robots
cost about one third as
much as an offshore
employee and as little
as one fifth of an
onshore employee.
Smaller facilities and
infrastructure footprint
Bots do not require
cubicles, desks, PCs,
restrooms, break
rooms, or telephones,
significantly reducing
the facilities and
infrastructure footprint.
Scalability
Bots can scale up or
down automatically
and respond
instantaneously to
changes in demand
and/or in business
growth without human
intervention.
Productivity/performance
Bots work 24/7 and do
not take vacations, call
in sick, or require
breaks. They perform
at their peak all the
time.
Quality/reliability/
consistency
Bots always perform
as commanded and
are 100% accurate,
eliminating human
error. They
consistently perform
their tasks the same
way every time.
Auditability
Bots log all of their
activities so there is
always a record of
what they did and
what the outcome
was, providing an
audit trail.
Process digitization
Bots are constantly
generating data about
process and make
tribal knowledge
repeatable while
providing opportunities
for continuous process
optimization.
Employee satisfaction
Bots free up humans
from performing
mundane, routine
work and allow them
to take on higher
value, more fulfilling
work that results in
higher job satisfaction
and morale.
1 2 3 4
8765
Quantitative
Qualitative
41© 2018 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights
reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.
Efficiency gains can be significant
Key automation opportunities highlighted below are based on the Level 2 processes with the highest potential percentage reduction in FTEs. These opportunities may provide significant cost savings opportunities for the finance organization. The details for these opportunities are further delineated in KPMG’s finance process toolkits.
ID Process area Process Estimated % Reduction in FTEs
1 Record to Report Month-End Reporting 50%
2 Record to Report Manage Process 40%
3 Record to Report General Ledger Close 50%
4 Source to Pay Requisition & Procurement 16%
5 Source to Pay Purchasing 16%
6 Source to Pay Supplier Management 26%
7 Source to Pay Receiving & Storage 55%
8 Plan to Perform Performance Reporting 37%
*Estimates are based on percentage of activity that can be automated and cost benchmarks for organizations with market cap in excess of $20 billion
(US). The key automation opportunities are for discussion purposes.
Questions?
Today’s presentation will be posted to
kpmg.ca/quarterlyupdate
Trevor Hammond
Partner, Audit
43© 2018 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights
reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.
Additional references
— ASC Corporate Finance Disclosure Report
— ASC Financial Reporting Bulletin
— KPMG US Tax Reform Website
Thank you
kpmg.ca
© 2018 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.