Accounting Standards

Global Business Needs Global Standards

After the first implementation of the IFRS (International Financial Reporting Standards) in 1998 and all the way through to 2005, there were only about 7000 listed companies that were capable of balancing according to the regulations of the IFRS. For many of these companies a second GAAP to adhere to after US-GAAP (United States Generally Accepted Accounting Principles) and it represented a challenge as they had to report by market segments with parallel valuation rates. As a result of these new regulations, the supporting IT systems started to reveal weaknesses and SAP responded to this challenge by implementing the new General Ledger. IM&C immediately aligned its tools and processes to this new technique.

An example of the impact of new regulations on the ERP systems parallel valuations is given by the fact that most of them perform parallel valuations in different parts of the application (e.g. fixedassets, inventory, cost center accounting, financial statement), but generally not in a consistent manner. There are systems which cannot cope with the requirements at all and therefore force the organization to either simulate everything in Excel, or start new implementations. SAP requires the definition of a leading valuation criteria when customizing with the need of taking into account the requirement for interfaces between different parts of the system (e.g between inventory and assets), in order to make sure that everything is aligned. When trying to integrate accounting at corporate level, the need of moving and consolidating data requires a high degree of customization, which could lead to a high level of complexity. All scenarios described above are complex and require a considerable degree of expertise to avoid wrong and convoluted solutions. This is where IM&C with its long term experience in the conceptual design and implementation of this type of projects can help clients to succeed.

Consolidated financial statements

n=76 companies, multiple answers possible.

consolidated financial statements

from: Explorative market study – Corporate Controlling,
competence center innovation, and market-oriented business management,
Hochschule Ludwigshafen, September 2007

 

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