How Starter kits Meet IFRS requirements – Introduction
This second series of blogs issued by the EPM starter kits & Innovation team describes how SAP® BusinessObjectsTM Financial Consolidation, Starter Kit for IFRS has been configured to meet International Financial Reporting Standards (IFRS). The blogs will help customers achieve legal compliance of IFRS thanks to a detailed explanation of how the main standards listed hereafter have been implemented in the starter kit for IFRS:
- IAS 1 – Presentation of Financial Statements (How Starter Kits meet IFRS – IAS 1)
- IAS 7 – The Statement of Cash Flows (How Starter Kits meet IFRS – IAS 7)
- IAS 21 – Effect of Changes in Foreign Exchange Rates (How Starter Kits meet IFRS – IAS 21)
- IAS 27 – Consolidated and Separate Financial Statements (blogs How starter kits meet IFRS – IAS 27 (part 1), How starter kits meet IFRS – IAS 27 (part 2) and How starter kits meet IFRS – IAS 27 (part 3))
- IAS 28 – Investments in Associates (How starter kits meet IFRS – IAS 28)
- IAS 31 – Interests in Joint Ventures (How starter kits meet IFRS – IAS 31)
- IFRS 3 – Business Combinations (How starter kits meet IFRS – IFRS 3)
At the end of the series, we will provide a link to the complete document describing how IFRS requirements (including standards that are not adressed in this series of blogs) have been taken into account in SAP® BusinessObjectsTM Financial Consolidation, starter kit for IFRS
Let’s get started with an introduction to SAP® BusinessObjectsTM Financial Consolidation, Starter Kit for IFRS
What is SAP BusinessObjects Financial Consolidation?
SAP BusinessObjects Financial Consolidation, part of SAP BusinessObjects enterprise performance management (EPM) solutions, is a powerful financial consolidation system. It can be integrated into both SAP and non-SAP software environments and can load data from any general ledger application.
What is the starter kit for IFRS?
The starter kit for IFRS is a configuration of SAP BusinessObjects Financial Consolidation, designed to perform, validate and publish a statutory consolidation in accordance with IFRS.
The starter kit for IFRS intends to meet the most common business requirements and, conversely, does not address specific ones. In particular, requirements specific to banking and insurance sector are not included in the starter kit. This is also the reason why “industry-specific” standards such as IAS 26 (Accounting and Reporting by Retirement Benefit Plans), IAS 41 (Agriculture), IFRS 4 (Insurance Contracts) and IFRS 6 (Exploration for and Evaluation of Mineral Resources) are not dealt with by the starter kit.
The starter kit for IFRS contains:
- a chart of accounts compliant with XBRL taxonomy for IFRS (see How Starter Kits meet IFRS – IAS 1)
- reports for data entry at the local level and data retrieval at the group level, including financial statements
- controls to validate data entered or imported into the application
- a comprehensive set of consolidation rules designed to produce consolidated data.
The starter kit for IFRS is provided to SAP BusinessObjects Financial Consolidation customers at no additional charge. It can be downloaded from SAP service market place. This series of blogs refers to the starter kit delivered in January 2010 (SP2).
More detailed information about the starter kit for IFRS is available on the SAP Service Marketplace (http://help.sap.com/):
- The Design description gives more detail about how the starter kit has been configured using SAP BusinessObjects Financial Consolidation features
- The Operating guide explains in a very concrete way how to prepare consolidated financial statements using the starter kit
IFRS in the starter kit
IFRS apply equally to consolidated and separate (individual) financial statements, except for some requirements that specifically address one or the other. For example, paragraphs 9-37 of IAS 27 are dedicated to consolidated financial statements, whereas paragraphs 38-40 only apply to separate financial statements.
In practical, the use of IFRS varies from country to country according to local regulations. For example, in the European Union, EU-endorsed IFRS are mandatory for listed companies’ consolidated statements whereas national GAAP usually still apply to individual statements and unlisted sector.
In the starter kit for IFRS, local data, as entered in packages  or after manual adjustments, is supposed to be IFRS compliant. It means that assets and liabilities, revenues, expenses, gains and losses are measured in accordance with IFRS requirements. Consolidation procedures embedded in the starter kit are compliant with IFRS.
 In SAP BusinessObjects Financial Consolidation, a package is a comprehensive set of data entry schedules that enables consolidated entities to enter their data (individual accounts) at local level.
In the next blogs, we will focus on how the Starter kit meets IFRS requirements, standard by standard, starting with How Starter Kits meet IFRS – IAS 1 (Presentation of Financial Statements)
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