Post on 21-Mar-2018
2
Copyright © 2012 SAP® BusinessObjects™. All rights reserved. SAP BusinessObjects and its logos, BusinessObjects, Crystal Reports®, SAP BusinessObjects Rapid Mart™, SAP BusinessObjects Data Insight™, SAP BusinessObjects Desktop Intelligence™, SAP BusinessObjects Rapid Marts®, SAP BusinessObjects Watchlist Security™, SAP BusinessObjects Web Intelligence®, and Xcelsius® are trademarks or registered trademarks of Business Objects, an SAP company and/or affiliated companies in the United States and/or other countries. SAP® is a registered trademark of SAP AG in Germany and/or other countries. All other names mentioned herein may be trademarks of their respective owners.
Legal No part of this starter kit may be reproduced or transmitted in any form or for any purpose Disclaimer without the express permission of SAP AG. The information contained herein may be
changed without prior notice. Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors. The information in this starter kit is proprietary to SAP. No part of this starter kit’s content may be reproduced, copied, or transmitted in any form or for any purpose without the express prior permission of SAP AG. This starter kit is not subject to your license agreement or any other agreement with SAP. This starter kit contains only intended content, and pre-customized elements of the SAP® product and is not intended to be binding upon SAP to any particular course of business, product strategy, and/or development. Please note that this starter kit is subject to change and may be changed by SAP at any time without notice. SAP assumes no responsibility for errors or omissions in this starter kit. SAP does not warrant the accuracy or completeness of the information, text, pre-configured elements, or other items contained within this starter kit. SAP DOES NOT PROVIDE LEGAL, FINANCIAL OR ACCOUNTING ADVISE OR SERVICES. SAP WILL NOT BE RESPONSIBLE FOR ANY NONCOMPLIANCE OR ADVERSE RESULTS AS A RESULT OF YOUR USE OR RELIANCE ON THE STARTER KIT. THIS STARTER KIT IS PROVIDED WITHOUT A WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT. SAP SHALL HAVE NO LIABILITY FOR DAMAGES OF ANY KIND INCLUDING WITHOUT LIMITATION DIRECT, SPECIAL, INDIRECT, OR CONSEQUENTIAL DAMAGES THAT MAY RESULT FROM THE USE OF THIS STARTER KIT. THIS LIMITATION SHALL NOT APPLY IN CASES OF INTENT OR GROSS NEGLIGENCE. The statutory liability for personal injury and defective products (under German law) is not affected. SAP has no control over the use of pre-customized elements contained in this starter kit and does not endorse your use of the starter kit nor provide any warranty whatsoever relating to third-party use of the starter kit.
3
Contents Chapter 1 Foreword .................................................................................................................................. 4
Chapter 2 Data Collection ........................................................................................................................ 5
Data Entry Format ..................................................................................................................... 5
Data Package Configuration ..................................................................................................... 6
Data Entry Principles ................................................................................................................ 6
Data Package Validation ........................................................................................................... 8
Chapter 3 Consolidation Process ......................................................................................................... 10
Consolidation Definition .......................................................................................................... 10
Consolidation Processing ....................................................................................................... 10
Configured Automatic Entries ................................................................................................. 11
Chapter 4 Analysis Process .................................................................................................................. 12
Publishable Financial Statements ........................................................................................... 12
Monitoring and Controlling the Consolidation Process ........................................................... 12
Analysis and Audit Trail .......................................................................................................... 14
Chapter 5 IFRS Adoption ....................................................................................................................... 17
Data Collection ........................................................................................................................ 17
Analysis and Audit Trail .......................................................................................................... 17
Chapter 6 Retrieval of Financial Statements ....................................................................................... 19
Statement of Financial Position .............................................................................................. 19
Statement of Financial Position (continued) ........................................................................... 20
Income Statement ................................................................................................................... 21
Statement of Other Comprehensive Income .......................................................................... 22
Statement of Cash Flows ........................................................................................................ 23
Statement of Changes in Equity ............................................................................................. 25
Foreword
4
Foreword
The starter kit for IFRS is a pre-configuration of SAP® Financial Consolidation. It is pre-configured with all
reports, controls and rules for performing, validating and publishing a statutory consolidation in accordance with IFRS standards.
Adopting IFRS is one of the most fundamental challenges that companies in many countries will have to deal with over the next few years. The starter kit for IFRS includes dedicated data entry and analysis reports to help companies manage IFRS adoption.
Data Collection
5
Data Collection
Data Entry Format
Account Typology
The chart of accounts of the starter kit for IFRS is based on the IFRS Taxonomy. This chart of accounts enables financial statements to be presented following the requirements of IAS 1:
Assets and liabilities are classified according to the current/non-current distinction.
In the income statement, expenses are classified by function.
This chart of accounts is easy to customize according to the group's requirements.
The chart of accounts is presented in appendix 1.
Naming Convention for Accounts
For financial accounts, the first letter of the code enables you to identify the accounting class: A for asset, E for equity, L for liabilities and P for profit and loss (net income). The first letter for subtotal accounts is T.
EXAMPLE:
Subtotal Account Code
Property, plant end equipment TA110
Lands and buildings A1110
Lands and buildings, Depreciation A1111
… …
Data Collection
6
Data Package Configuration
The data package is available in English, German and French. It groups together schedules that are used for entering and retrieving data at the reporting unit level .
Three types of schedules exist:
Summary schedules, used to guide the data entry and control data
Data entry schedules that are grouped into books by type of information: balances, securities and shareholdings, movement analysis for balance sheet items, intercompany transactions
Data retrieval schedules: Financial statements, flow balances, control statements
EXAMPLE: Package contents
Data Entry Principles
Sign of Indicators
Assets are entered as positive amounts except for amortization and depreciation of assets. These are entered as negative amounts.
Liabilities and Equity are entered as positive amounts.
Expenses are entered as negative amounts and income figures as positive amounts.
When the schedule structure allows it, signs are pre-entered to facilitate data entry.
Data Collection
7
Order of Package Data Entry
A step-by-step approach for entering data is configured in the package thanks to its architecture and the links that have been created between the schedules.
The steps are as follows:
1. Enter (manually or importing) the closing balance (balance sheet and income statement)
2. Enter the analysis of securities and shareholding
3. Enter the period movements of the balance sheet items (acquisition, disposal, etc.)
4. Enter intercompany breakdown (reciprocal operations, Internal gains and losses on disposal of assets, dividends, internal provisions)
Breakdown by Flow
Flow entries allow you to identify variations in the balance sheet between the opening and closing balance and therefore automatically generate the Statement of Cash Flows.
The flows available in the package may be classified into two categories:
Flows for current transactions (purchase, increase in depreciation, fair value, etc.)
Flows for special transactions (changes in accounting policies, internal merger, etc.)
Data entry schedules
Control schedules (Data retrieval)
Package summaries
Data entry for equity method companies
Financial Statements (Data retrieval)
Adjustments to IFRS data entry/control
Data Collection
8
Data Package Validation
Types of Control
There are two types of control:
Blocking controls: if these are not valid, the status of the data package cannot be validated. All these controls must be valid.
Non-blocking controls: these controls are simply warnings and do not prevent the data package from being validated. (For instance it is possible to enter the number of stocks of investment in subsidiaries and capital in order to generate automatically the portfolio and the scope. This data entry is optional and linked to non bloking controls).
Set of Controls
The controls are grouped in the package into sets of controls. Two control sets are configured in the starter kit for IFRS, one for subsidiaries and joint-ventures and one for equity method companies.
Subsets of Controls
In the package, the controls are grouped together into subsets, where each subset of controls corresponds to a book of schedules.
Main Types of Controls
Aim Example
Check balances
Assets equal Equity and Liabilities
Gross value of assets higher or equal to depreciation and impairment
Securities and Shareholdings
Exhaustive breakdown of investment in subsidiaries by shares
Complete analysis of investment in subsidiaries by flows
Complete analysis of net equity by flows
Data entry of number of shares in capital and in investiment in
subsidiaries
Flow analysis
Complete analysis of assets and liabilities by flows
The transfer flow must balance
Intercompany breakdown Exhaustive breakdown of reciprocal accounts, dividends, gains and
losses on disposal of assets and provision by partners
Data Collection
9
Control Levels
Each control is linked to a level. The level of control to be reached is set by the team at the central site when the package is generated.
2 levels of control exist in the starter kit for IFRS:
1 – Balance Analysis (Income Statement and Balance Sheet)
2 – Flow analysis (Income Statement and Balance Sheet by flows)
The control levels check from the minimum level (LEV1: submission of Balance Sheet and Income Statement only) to the maximum level corresponding to a full package (LEV2: complete submission).
When level 1 is required to be reached, only the controls attached to level 1 must be valid.
Consolidation Process
10
Consolidation Process
Overview of the consolidation process in SAP Financial Consolidation
Consolidation Definition
The settings of a consolidation definition are:
A category and a data entry period: selection of the data to be consolidated
(for example: Actual, 2011.12)
A scope
A variant
A consolidation currency.
The ‘variant’ parameter is a technical dimension that allows different consolidation settings to be selected for a given category, a given data period and a given currency:
Set of rules (monthly conversion / quaterly conversion / year to date conversion)
Audit ID filter restriction (IFRS adoption)
Scope (pro-forma statements)
Exchange rates table (pro-forma statements)
Four variants are pre-defined in the starter kit for IFRS: IFRS - YTD, IFRS – Periodic, Local GAAP – YTD and Local GAAP – Periodic. If needed, these variants can be renamed and new variants can be created.
Consolidation Processing
Two processing modes exist: full processing and incremental processing.
During the course of full processing, the software executes the following steps:
Read the scope
Load data: data of the period (package data and manual journal entries) and the opening balance, if any
Convert package data and manual journal entries
Run the rules of the selected set of rules (see below).
For incremental processing, the software executes the same steps as described above but only for the manual journal entries recorded since the last consolidation.
The conversion of data entered in foreign currency is carried out as follows (using the closing rate method):
The closing balance of the balance sheet is converted using closing exchange rates, except for net equity which is recorded using historical exchange rates (calculation and booking of the currency translation adjustment)
The net income of the period is converted using average exchange rates
Balance sheet movements of the period are converted using the average exchange rates of the period.
Depending on the set of rule selected in the consolidation definition and the type of conversion rate filled in in the conversion rate table, periodic or year to date conversion will apply.
The configuration handles the following methods of consolidation: full consolidation, proportionate consolidation and the equity method.
Consolidation Process
11
The scope changes handled by the starter kit for IFRS set of rules are:
Acquisitions
Loss of control
Equity transactions
Changes in interest rates of associates and joint-ventures
Internal mergers
Flows generated during the consolidation process allow you to retrieve changes due to currency translation differences and changes in scope consolidation.
These flows makes it possible to automatically produce the following financial statements:
Statement of Comprehensive Income
Statement of Cash Flows
Statement of Changes in Equity
Configured Automatic Entries
The starter kit for IFRS includes a set of rules that enable you to produce consolidated data using data from the data entry packages.
This set of rules can be enhanced in order to meet the group’s specific accounting policies.
The automatic consolidation entries are:
Elimination of internal reciprocal operations
Elimination of internal provisions
Elimination of internal dividends
Elimination of internal gains and losses on disposal of assets
Goodwill booking
Elimination of investment in subsidiaries
Calculation of currency translation adjustments
Calculation of non-controlling interests
In addition to standard consolidation rules, a number of technical rules have been configured in order to:
Calculate and store the subtotal accounts
Calculate and store line items for the Statement of Other Comprehensive Income, the Statement of Cash Flows and the Statement of Changes in Equity
Calculate and store segment information
Analysis Process
12
Analysis Process
Publishable Financial Statements
The starter kit for IFRS contains a complete set of financial statements which follow the requirements of IAS1:
A Statement of Financial Position in the current/non-current format
An income statement with an expense classification by function
A Statement of Other Comprehensive Income
A Statement of Cash Flows
A Statement of Changes in Equity
Financial Statements analysed by segment are also available:
Revenue by segment
Revenue by geographical area
Non current assets by geographical area
Monitoring and Controlling the Consolidation Process
Accounting Reports
The accounting reports (balances, general ledgers, debit-credit ledgers) allow for the analysis of consolidated data by drilling down to the original data.
Analysis Process
13
Consolidation Analysis
The pre-configuration contains schedules that enable you to validate each step of the consolidation process:
Check packages
Check main balances
Check conversion
Intercompany reconciliations
Transition from local to consolidated figures
Net Equity, dividends and goodwills
EXAMPLE: Consolidation control dashboard
Analysis Process
14
Analysis and Audit Trail
The starter kit for IFRS contains schedules that allow for the analysis of consolidated data.
Each data item is linked to an audit ID and a journal entry number which makes the audit trail possible.
The audit ID allows the accounting origin to be tracked. For instance:
The PACK01 Package data audit ID tracks data that has been entered in the packages
The ELIM10 audit ID is linked to the elimination of reciprocal transactions
EXAMPLE: Transition from local to consolidated figures
Analysis Process
15
With analysis schedules, each line of the Statements of Financial Position and of the income statement can be detailed by account, reporting unit or audit ID.
EXAMPLE: Analysis of a Statement of Financial Position line by account
Analysis Process
16
Each line in the Statement of Other Comprehensive Income, the Statement of Cash Flows and the Statement of Changes in Equity can be analysed via drill down to analyse which account/flow pairs generated the amount.
EXAMPLE: Analysis of a Statement of Cash Flows line item (focus on the net cash flows from financing activites):
IFRS Adoption
17
IFRS Adoption
Data Collection
In the starter kit for IFRS, adjustments to IFRS can be entered on dedicated audit IDs directly in package schedules.
EXAMPLE: Income Statement by audit ID
The starter kit for IFRS also provides the ability to post IFRS specific journal entries on dedicated central audit IDs.
Thanks to audit ID filter restrictions used in the consolidation definition, IFRS adjustments can be taken into account in the IFRS consolidation process and not in the local GAAP consolidation process.
Analysis and Audit Trail
The starter kit for IFRS provides a complete set of pre-configured reports for comparing local GAAP and IFRS:
Financial statements for comparing data consolidated according to local GAAP and IFRS
Balance reconciliation with an analysis by audit ID of differences between local GAAP and IFRS
Analysis schedules for complete audit trail of differences until journal entry number
18
EXAMPLE: Analysis of the differences between local GAAP and IFRS for a Statement of profit or loss line item (detail by account and audit ID)
Retrieval of Financial Statements
19
Retrieval of Financial Statements
Statement of Financial Position