Ifrs Sap

Conversion Approach
Each phase of the IFRS conversion reflects a comprehensive set of activities to

be considered and acted upon.
Accounting Policy Assessment and Determination for Opening Balance Sheet*

10 – 12 weeks
Legend
Phase I 3 – 6 months = Project Checkpoint
Assess
Phase II
Plan and Design
10 – 12 months * = Accounting Firm Activity
• IFRS eligibility status* Phase III

• IFRS adoption/deployment Build and Test
options • IFRS adoption strategy TBD
• Data gathering needs • IFRS deployment plan
• Accounting policy • Accounting systems and data Phase IV
• Key accounting and tax
policy differences* revisions* conversion Deploy
• Internal accounting • Financial reporting and
• Current state systems, internal accounting controls
interfaces, and reporting controls* • Supporting business • Accounting and sub-systems
capabilities • Technical architecture processes per deployment strategy
• Supporting business design for GAAP to IFRS • Financial statement
processes strategy • Internal controls*
restatement* • Business processes to
• Organizational change • Common IFRS data model
readiness • Business process • Regulatory and statutory locations
• Existing employee skills set changes based on new reporting (finance & tax) • Regulatory reporting
and training needs requirements • Organizational structure and capability
• Key stakeholder needs • Internal/external performance measurement • Performance measurement
system targets
• Employee compensation tied communication strategy
• Employee performance • 3rd party contracts to • Organizational structure
to performance metrics correspond with new
• Internal and external metrics aligned with IFRS • IFRS compliant financial
reporting metrics
communications needs • Training program statements*
• Training, work-shadowing,
• Executive leadership support • Ongoing IFRS compliance
and skills assessment* • Footnote and disclosures*
• Long-term contracts plan*
• Communications
Program and Journey Managementplan • IFRS compliance updates*
Change Management (communication, training, user readiness, sponsorship)

Key Impact areas
Impact due to IFRS implementation varies based on the GAAP which is

presently being followed. Some of the commonly noticed key impact areas are
Property, Accounting
Impairment Intangible Inventory Revenue
Plant & for Financial
of Assets Assets Valuation Recognition
Equipment Instruments
Key Impact Areas –
Impairment of Assets (IAS
36)
Situation
Current
under Carrying value
Situation
Cash Flows from IFRS versus the “Fair
asset determine Value” of the
the need for asset determine
impairment the need for
impairment
Impairment IFRS allows

losses cannot be impairment losses
revised or to be reversed or
reversed revised
SAP Solution
Recording
Create a
and Use
separate Integration
reporting of “Investment
depreciation with parallel
Impairment Support”
area to track GAAP
separately functionality
impairments accounting.
from original in SAP
to assets.
APC
Multiple Solutions available for
IFRS Accounting
There are 4 key implementation options available when adopting
IFRS
Option 1: Additional Company Code (Classic GL)
 An additional company code as well as accounts are created to capture IFRS postings
 One or more special purpose ledgers may be required
 Additional configuration is required to support foreign exchange valuations, new financial
statement versions, asset accounting, etc.
Option 2: Parallel Accounting with Special Purpose Ledger (Classic GL)
 One or more special purpose ledgers are required
 Additional accounts are created to capture IFRS postings
Option 3: Parallel Accounting with Additional Accounts (Classic GL)
 Additional accounts are created to capture IFRS postings
 A set of common accounts, US GAAP accounts, local GAAP accounts, as well as IFRS
accounts will be setup and maintained
Option 4: Parallel Ledger (New GL)
 A separate ledger will be created in order to capture IFRS postings and maintain a
complete set of IFRS books
 The IFRS ledger is posted to in parallel with US GAAP and other regulatory ledgers
New G/L Solution for
Parallel Accounting
SAP’s New General Ledger Accounting enables the use of Parallel Ledger
accounting as a method to achieve Multi-GAAP accounting
New General Ledger  Postings via new
transactions
Only Specified Ledgers are Updated

All Ledgers Updated Simultaneously
FB01L and FB50L

0L Leading Ledger
FI-AR
FI-AP
… Non Leading Ledger
SD  Foreign currency
MM Valuation Program
PP Non Leading Ledger FAGL_FC_VALUA
TION
PM
…
 FI-AA depreciation
Other Non Leading Ledgers areas
IFRS, US GAAP, Local GAAP

Reports are based on the
corresponding ledger
Summary
 IFRS is an Accounting Framework that is fast getting mandated by

countries around the world.
 Deploying IFRS has challenges as well as opportunities to improve

the accounting process.
 There are a number of IFRS requirements, solutions for which will

need to be built into SAP systems.
 SAP provides a number of options to deal with Parallel Accounting,

including Parallel Ledgers which is introduced in the ECC versions.
 Unique transition challenges are likely to be faced by customers

(especially in US). The transition to IFRS is an important project and
needs to be planned out well in advance.

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What are some of the key impact areas when adopting IFRS?

What are the different options available for implementing IFRS accounting in SAP?

Conversion Approach

Each phase of the IFRS conversion reflects a comprehensive set of activities to

Accounting Policy Assessment and Determination for Opening Balance Sheet*

• IFRS eligibility status* Phase III

Change Management (communication, training, user readiness, sponsorship)

Impact due to IFRS implementation varies based on the GAAP which is

Impairment IFRS allows

Only Specified Ledgers are Updated

FB01L and FB50L

IFRS, US GAAP, Local GAAP

 IFRS is an Accounting Framework that is fast getting mandated by

 Deploying IFRS has challenges as well as opportunities to improve

 There are a number of IFRS requirements, solutions for which will

 SAP provides a number of options to deal with Parallel Accounting,

 Unique transition challenges are likely to be faced by customers

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