Configuration and other set up needed for IFRS reporting

[former_member488728]

I am in urgent need of end to end SAP configuration and other necessary set-up, developments required for IFRS Reporting. My client is on ECC 6.0.

Please help me.

Regards

Deepak Gupta

[sanilbhandari]

Hello deep_anjali

Before you can start configurations, you need to spell out what exactly you are looking with respect to IFRS. You need to discuss the below:

(a) IFRS reporting can be addressed to either parallel accounting principle (non-leading ledger) or GL base principle (by reserving seperate group of GL codes in chart of accounts). What is your requirement??

(b) Which reporting is main reporting for the group company ? (Whether IFRS is main reporting / IAS / US GAAP etc)

(c) List down the requirements of IFRS which are different to the legal reporting

(d) What is the financial reporting period under IFRS and Legal ? Is these two are different?

(e) Please note that, the IFRS impacts are not same for all industries. It varies from the industry to industry. So what are your customer specific requirements and if you are setting up a new system completely

(f) Do you have a New GL system or a classical GL System? Do you use S/4HANA?

(g) Do you need also to specify revenue recognition as well?

When you have a bit more clear queries, i would suggest to post specific questions, you need help on guidance for IFRS.

Hope this will helps

Thanks & Regards

Sanil Bhandari

[former_member488728]

Thanks Sanil for the quick reply.

I have done a lot of home work before posting and read out the blogs as well to have some basic knowledge. Client is on ECC 6.0 EHP 8.0 and new GL is activated. Reporting period is different as per local GAAP and IFRS as well.

I have done some initial configuration like

1.Creation of a Non-leading ledger for IFRS and Assignment of IFRS accounting principals

2. New Depreciation area for IFRS reporting.

Client looking for some high level Prototype solution as well.

Here not sure what else I need to set-up or configure or activate any Business function related to IFRS.

Please suggest

Thanks

Deepak Gupta

[sanilbhandari]

Hello deep_anjali

If only a non leading ledger and asset accounting is all you need, you have already completed the prototype.

However, it looks to me way too simple since IFRS has lot of other requirements such as FX Valuation, FX Adjustments in Asset Accounting, Revenue Recognition based on completion of performance obligation (IFRS-15), Lease Accounting (IFRS-16). It depends on what is your requirement and that is what my questions were alluding to. Without knowing the exact business requirements, how can one suggest the solution or configuration to be done. You should go back and ask your customer what are the business requirements !!

Thanks & Regards

Sanil Bhandari

[former_member488728]

Hi Sanil,

Client gave us a high level requirement for prototype solution along with a book of IFRS Accounting principals. They do have FX valuation and Revenue Recognition process as well. Client wish to implement IFRS fully in all respect.

--I would like to know what I need to do in FX valuation or Revenue Recognition or other related necessary config/set-up.

--Is there any SAP standard reports on IFRS ?

-- Shall I assume that by assigning IFRS Accounting principals, SAP System will behave accordingly complying with IFRS accounting principals ?

Warm Regards

Deepak Gupta

[sanilbhandari]

Hello deep_anjali

First of all if you are providing an update to answer, please add it as a comment to be considerate to others.

1) For FX revaluation, you need to set up a new valuation principle to valuate balances and open items as per IFRS

2) For asset accounting, you need to do the following

- Set up a parallel ledger

- Set up a new Depreciation area and assign to the ledger group representing IFRS Accounting principle

- Set up a derived depreciation area if you are on ECC

- If you are working for an Indian Customer, the acquisition values will have to be adjusted to take care of FX Treatment on Capital Acquisition which differ in case of Indian GAAP and IFRS

- Create Asset History Sheet to represent IFRS Reporting

3) For Revenue Recognition, there is an SAP Tool called as RAR, which needs to be used. The below blogs should be useful

https://blogs.sap.com/2018/12/13/understanding-revenue-accounting-blog-series1-inbound-processing-re...

https://blogs.sap.com/2020/09/11/revenue-accounting-and-reporting-rar-concept-and-configuration/

https://blogs.sap.com/2016/09/13/revenue-accounting-and-recognition-rar-part-1/

https://blogs.sap.com/2016/02/11/revenue-recognition-the-new-ifrs-standard-and-its-implications/

On ECC, the RAR is an add on and in S/4HANA, it is the only tool which can be used.

Here again, you need to ask your accounting business colleagues on how the set up should be done and what are the various performance obligation parameters which should be set up. Based on the same, please work with an SD Colleague and a person with BRF+ expertise to set up RAR.

4) For Legal Reporting, you need to create FSV to represent IFRS Reporting

I still do not get what exactly you need to do in IFRS since it depends on your client's requirement and which business he or she is in. You need to talk to your accounting manager and see what else is required from IFRS Perspective

Thanks & Regards

Sanil Bhandari