Utilizing HFM to Handle the Requirements of IFRS

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Ranzal Practice Director and Oracle ACE, Peter Fugere guides attendees through best practices on building HFM applications to consider the impact of IFRS. HFM has been used for years to do multi-GAAP reporting, so IFRS is not completely uncharted waters. Many companies in Europe and Canada have already moved, and their experience provides guidance for companies in North America. HFM has specific functionality that makes the IFRS transition easier and for North America, moving now may minimize costs later associated with statutory reporting and historical data collection.

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  • Consider, for example, the difference between telling your child to be home at a reasonable hour (principles based) and telling her to be home at 11 p.m. and then providing for the 15 contingencies that might justify a different time (rules based).
  • Consider, for example, the difference between telling your child to be home at a reasonable hour (principles based) and telling her to be home at 11 p.m. and then providing for the 15 contingencies that might justify a different time (rules based).
  • While IFRS currently fills approximately 2,000 pages of accounting regulations, U.S. GAAP comprises over 2,000 separate pronouncements, many of which are several hundred pages long, issued in various forms and formats by numerous bodies. The difference in volume alone reflects a difference between the historically rules-based approach underlying U.S. GAAP and the principles-based approach underlying IFRS.
  • Presentation. Users of IFRS statements quickly become aware of the fact that, while IFRS requires that a balance sheet and an income statement contain certain minimum information, IFRS does not require a precise format for the display of that information. Pre-Operating and Pre-Opening Costs. The differences between IFRS and U.S. GAAP can result in a difference in the assets appearing on an entity’s books. IFRS requires an entity to expense pre-operating and pre-opening costs and costs incurred in startup, training, advertising, moving and relocation. Any of those assets on a U.S. GAAP balance sheet would disappear in financial statements based on IFRS. Borrowing Costs. U.S. GAAP, on the other hand, mandates capitalization of borrowing costs for qualifying assets, but IFRS has permitted an entity to elect whether to capitalize or expense borrowing costs for qualified assets, provided the entity is consistent in its approach. Reflective of the convergence movement, IFRS will use the U.S. GAAP approach after Jan. 1, 2009. Fair Value. Even where the use of U.S. GAAP and IFRS result in the same assets appearing on a balance sheet, the values attributed to those assets may be different. IFRS permits an entity to regularly revalue property, plant and equipment to fair market value. An entity cannot pick and choose under IFRS, however, and if it revalues one item within a class of assets, it must revalue all items within the same class. IFRS provides for crediting increases in values to a revaluation reserve in the equity section of the balance sheet while decreases in values are treated as expenses to the extent the decreases exceed any previous revaluation increases. For investment property, both GAAP and IFRS approve of a historical cost based method with depreciation and impairment, but IFRS also permits an entity to account for the property on the basis of fair market value, recognizing changes in value as profit or loss. Obviously, if the two sets of standards result in reflecting different assets and asset valuations, one can also expect they will result in a difference in reported income or retained earnings. Inventories. IFRS permits an entity to reverse inventory write-downs in certain situations, whereas U.S. GAAP does not. IFRS also requires the recognition of certain development costs that U.S. GAAP accounting does not recognize. In valuing inventory under IFRS, LIFO is prohibited. Revenue recognition. Reflective of its principles-based approach, IFRS guidance regarding revenue recognition is less extensive than U.S. GAAP. IFRS, for example, does not have specific guidance for software revenue recognition. Extraordinary items. IFRS prohibits reporting items as extraordinary while U.S. GAAP permits reporting items as extraordinary in the income statement, albeit under very limited circumstances. Remember that many IFRS standards affect tax reporting The potential effect of IFRS on an enterprise’s income taxes is much broader that just IAS 12. The full implementation of all IFRS standards will affect an enterprise’s pre-tax reported profits and equity. You should therefore engage your tax professionals in the complete IFRS project, not just in the IAS 12. To determine the proper treatment for preparation of tax returns and computation of the tax provision, tax professionals will need to understand the impact of all IFRS standards – at the time when IFRS is adopted as well as on an ongoing basis. Many IFRS adjustments will create new or additional temporary differences that will need to be recognized in tax provisions and possibly on tax returns. Do not leave income tax computations to the last minute. Understand early how IRFS standards, including IAS 12, will affect your effective tax rate. You will need this knowledge not only for recasting financial budgets and forecasts, but also to communicate the impact of the IFRS changeover to stakeholders.
  • The financial statements will have new names. There is also a new statement reconciling net income to cash flow which must be included in the financial statement notes. The name changes though are just the beginning. In order to achieve the objective of cohesiveness between statements, the format of the statements will change. All statements are to be subdivided into the same general categories – a business section (subdivided further into operating and investing), a financing section , income taxes , discontinuing operations and equity . These classifications are similar to how today’s cash flow statement is divided.
  • Balance Sheet (Statement of Financial Position) biggest differences: It isn’t obvious that assets balance to liabilities plus equity The new format does not separate assets and liabilities into distinct sections. Instead, assets and liabilities are netted together in each of the sections. How mgm’t segregates assets or liabilities into each of the different section is subject to a fair bit of mgm’t judgement and their basis for classification must be disclosed in the financial statement notes. Totals for short-term and long-term assets in each section of the statement are optional. An entity must disclose the totals for short-term, long-term and total assets and liabilities but they can do so either in the statement or in the notes to the financial statements. There is no familiar total for liabilities plus equity. IFRS allows and encourages assets and liabilities to be valued at fair value rather than at historical cost, creating what is known as “remeasurement” adjustments on the Statement of Comprehensive Income. Despite the new format, the balance sheet still balances. Income statement (Statement of Comprehensive Income) biggest differences: Everything above net income is divided into the same categories that the balance sheet is classified in Within the OCI section, the entity must indicate to which category (operating, investing or financing) the actual line items relate to. Line items are further identified by function and then nature. For example, CoGS must be further subdivided into “Material costs”, “Labour costs”, and “Overhead”. Details for G&A expenses must also be disclosed. If these guidelines result in too lengthy of a statement, the entity can summarize the statement, but they must still present the details in the financial statement notes.
  • Cash Flows (Statement of Cash Flows) biggest differences: The indirect method of reporting cash flow will no longer be allowed. The indirect starts with income and making adjustments to arrive at cash flow. Most organizations opt to report under the indirect method since information for this format is usually more easily available from their accounting systems The direct method reports cash changes based on how much cash is paid for or received as a result of various activities. Another big difference is that there are no more cash equivalents. The statement reports only on changes in cash.
  • SEC rules currently require US public companies to include an audited balance sheet for the two most recent fiscal year-ends and audited statements of income, cash flows, and shareholders’ equity for the three most recent fiscal years. Additionally, IFRS requires a company to prepare and present its opening IFRS balance sheet on the face of the statement of financial position, which increases the total number of balance sheets required to three. Source: PWC – 10Minutes on Transitioning to IFRS If the U.S. moves forward with IFRS, public companies would need to support both U.S. GAAP and IFRS during a transition period.
  • Fewer years that a company has to maintain financial reporting in US/Canadian GAAP and also IFRS.
  • IFRS implementations has enterprise wide application – with implications beyond financial reporting – reaching and affecting all parts of the business. It requires modification of processes and systems to support the new accounting and reporting requirements. Therefore, it makes sense to assess readiness sooner rather than later.
  • Action Plan
  • IFRS could (actually most likely will) require adjustments to financial reporting systems, existing interfaces, and underlying databases to incorporate specific data to support IFRS reporting.
  • Begin your transition by fixing your starting point with a thorough assessment. Find out which IFRS or local GAAP requirements currently apply in the different jurisdictions where you report. Understand which specific differences between US/Canadian GAAP and IFRS will bring the most change—and risk—to your company. Then develop an internal structure to manage the changes ahead. Involve senior executives who represent the functions that are most affected by IFRS, such as tax, IT, HR, and treasury. Be sure you’re taking responsibility for educating your board and audit committee members.
  • Create an IFRS timeline that specifies when you’ll begin organization-wide transition to IFRS reporting, when you’ll actually file under IFRS, and all the stops along the way. One Approach you can take: Targeted implementations in statutory locations can be a smart way to road-test the technology, process, and accounting policy changes that will come with IFRS. From there, you can move on to pilot conversions of whole subsidiaries in areas where IFRS is permitted or will soon be required.
  • CoA = Chart of Accounts Oracle’s Financial Management Solutions help solve the fundamental information integrity issues, such as how to consistently collect, calculate, analyze, and store data from multiple systems, that are associated with the transition to a new accounting framework. By synchronizing data centrally from all systems, Oracle’s Financial Management Solutions improve transparency into business, financial and compliance performance across the enterprise; strengthen your control to enforce compliance with regulatory standards; and increase operational efficiency. Having accurate, consolidated information simplifies the task of producing high quality, transparent and comparable IFRS-compliant reports, helping you free up scarce resources to grow your business.
  • Centralized business functions in HFM & FDM make it easier to enforce consistent use of IFRS across reporting entities. Oracle’s Hyperion Financial Management and Oracle’s Hyperion Financial Data Quality Management offer standardized data management and financial consolidation and reporting processes for all of your source systems. In other words, the system holds a single instance of the full management and statutory chart of accounts and a completely separate and customizable hierarchy for any of the relevant GAAP's. In practical terms, this means that any of the chart of account lines can, if required, be analyzed to any of the applicable GAAPs.
  • Oracle applications also provide a number of specific capabilities to support individual IAS and IFRS requirements, summarized in the table below:
  • Oracle applications also provide a number of specific capabilities to support individual IAS and IFRS requirements, summarized in the table below:
  • This ideal consolidation model is completely amenable to change, and you can implement those changes dynamically and rapidly. HFM isolates data from its original capture to the final result, creating a complete and reliable audit trail. The solution also enables management to drill down to investigate data when necessary, to assist in reconciling or adjusting entries.
  • Centralized business functions in HFM & FDM make it easier to enforce consistent use of IFRS across reporting entities. Oracle’s Hyperion Financial Management and Oracle’s Hyperion Financial Data Quality Management offer standardized data management and financial consolidation and reporting processes for all of your source systems.
  • Fortunately, Oracle Hyperion Financial Management has smart data capture. End users choose a “point of view” that is relevant to them in the underlying database, and enter data in Web-based schedules that capture multi-GAAP data in a column format. Segmented reporting schedules, where required, can be populated using subforms in a separate window, thus scrolling pages is minimal. Administrators can guide end users with written instructions in an online form, or include comments at the cell level that explain an IFRS adjustment. These features support end users, help safeguard the reliability of the information, and increase confidence in the integrity of the system Segment Reporting In theory, segment reporting is used to identify appropriate business or geographic segments. The reality is that evolving standards are increasing the level of detail required for the “primary” segment, making the use of separate “secondary” segment reporting necessary. The increase in segment reporting means that reporting agents are more concerned with how to capture multidimensional data, such as multi GAAP data, from reporting entities. And they want to do this without encumbering end users with unmanageable schedules and forms that seem to scroll forever.
  • FDM – New application, new import formats, new locations, new mapping tables Companies transitioning to IFRS will inevitably find themselves having to capture data in new ways or gathering additional information. They may need to use new accounting definitions and valuations for certain balance sheet and income statement lines, obtain more comprehensive reporting from overseas operations, provide more detailed segment reporting, or comply with wider disclosure obligations. A change in accounting standards may not sound like a strategic change, but it does impact the way that the business is run, the way that success is measured, and the information and records that a company needs to maintain.
  • FDM – New application, new import formats, new locations, new mapping tables Companies transitioning to IFRS will inevitably find themselves having to capture data in new ways or gathering additional information. They may need to use new accounting definitions and valuations for certain balance sheet and income statement lines, obtain more comprehensive reporting from overseas operations, provide more detailed segment reporting, or comply with wider disclosure obligations. A change in accounting standards may not sound like a strategic change, but it does impact the way that the business is run, the way that success is measured, and the information and records that a company needs to maintain.
  • Utilizing HFM to Handle the Requirements of IFRS

    1. 1. Utilizing HFM to Handle the Requirements of IFRS Peter Fugere Vice President Ranzal & Associates [email_address] http://www.linkedin.com/in/peterfugere #8075
    2. 2. Introduction <ul><li>Part of largest HFM practice in North America, Ranzal & Associates </li></ul><ul><li>Oracle ACE </li></ul><ul><li>Certified in HFM and Enterprise </li></ul><ul><li>Consulting for 12 years </li></ul><ul><li>Oracle Hyperion Financial Management Tips And Techniques – Oracle Press, McGraw Hill - Fall 2011 </li></ul>
    3. 3. What is IFRS? <ul><li>IFRS stands for International Financial Reporting Standards </li></ul><ul><li>IFRS is a global set of accounting standards developed by the International Accounting Standards Board (IASB) which is an independent accounting standards body, based in London </li></ul><ul><li>IFRS is intended to be a more principles-based set of standards rather than the rules-based approach of U.S. GAAP. The two systems (IFRS and U.S. GAAP) differ conceptually on a number of points. </li></ul><ul><li>Global companies need to move to IFRS. </li></ul>
    4. 4. Why IFRS? <ul><li>Economic globalization brings increased demand for high quality, internationally comparable financial information. </li></ul><ul><li>Facilitate global capital flows </li></ul><ul><li>Bring greater clarity and consistency to financial reporting in the global marketplace. </li></ul><ul><li>Provide greater transparency and comparability of financial information across countries. </li></ul>
    5. 5. IFRS vs. U.S. GAAP Eventually, U.S. GAAP will go away, and IFRS will be the lone standard. Source: Deloitte – Straight Talk Book No. 11
    6. 6. Important / Significant Differences <ul><li>The way pre-operating and pre-opening costs are reported. </li></ul><ul><li>The fact that IFRS prohibits the use of LIFO for inventory valuation. </li></ul><ul><li>Borrowing costs </li></ul><ul><li>Fair value </li></ul><ul><li>Revenue recognition </li></ul><ul><li>Extraordinary items </li></ul>Source: CAMagazine.com – The Road to IFRS
    7. 7. <ul><li>IFRS Statement No. 1 requires companies to include a number of reconciliations in their first financial statements presented under IFRS, as follows: </li></ul><ul><li>A reconciliation of the company’s equity previously reported under GAAP as of its transition date to its equity restated under IFRS at that date; </li></ul><ul><li>A reconciliation of the company’s equity as of the entity’s most recent annual financial statements under GAAP to its equity restated under IFRS at that date; and </li></ul><ul><li>A reconciliation of its last published US GAAP total comprehensive income with its restated IFRS comprehensive income for the same period. </li></ul><ul><li>For all three of the reconciliations required, companies must distinguish between GAAP differences and correction of errors. </li></ul>
    8. 8. Among Others: IAS/IFRS US GAAP Fair Market -Revaluation FA & Investments Only certain FI Cash Flow Indirect (Favored) Direct/Indirect Consolidation Control 2 models Joint Ventures Proportional ok Only Equity Pensions 15 differences R&D: “Development” Dev. Capitalized Dev. Expensed Inventory No LIFO LIFO OK Impairment 1 Step, reversible Interest rate sensitive 2 Step, no reversal
    9. 9. How are the Statements Changing? Income Statement Balance Sheet Statement of Retained Earnings Statement of Cash Flows Statement of Comprehensive Income Statement of Financial Position Statement of Changes in Equity Statement of Cash Flow
    10. 10. How are the Statements Changing?
    11. 11. How are the Statements Changing?
    12. 12. <ul><li>Approximately 100 countries already require, allow or are in the process of converging their national accounting standards with IFRS. </li></ul><ul><li>Japan, the United States and Canada have active programs designed to achieve convergence with IFRS. </li></ul><ul><li>China’s Accounting Standards Committee has announced that convergence is a fundamental goal of its standard-setting program. </li></ul><ul><li>The Institute of Chartered Accountants of India has taken up the issue of convergence of Indian accounting standards with IFRS. </li></ul><ul><li>The EU gave global convergence a kick-start when the EU mandated that EU companies with securities listed on an EU exchange prepare their consolidated accounts for all fiscal years beginning on or after Jan. 1, 2005, under IFRS. (>7,000 companies) </li></ul>
    13. 13. If you haven’t started yet…
    14. 14. Dates <ul><li>The US Securities and Exchange Commission (SEC) recently issued its proposed roadmap for conversion from US GAAP to IFRS. </li></ul><ul><ul><li>Mandatory reporting under IFRS beginning in 2014, 2015 or 2016, depending on the size of the issuer, and provides for early adoption in 2009 by a small number of very large companies that meet certain criteria. </li></ul></ul><ul><li>With compliance beginning in 2014. The SEC says it will decide in 2011 whether to hold to that schedule. </li></ul><ul><li>One of the biggest lessons learned from European companies that converted to IFRS in 2005 was that they needed more than the two years time they were given. </li></ul>Source: PWC – Mapping the Change
    15. 15. Early Conversion to IFRS has Appeal <ul><li>Simplified reporting </li></ul><ul><li>Reduced operating costs </li></ul><ul><li>Greater transparency and comparability for investors </li></ul><ul><li>Improved access to capital </li></ul><ul><li>Plus some companies see their competitors already embracing IFRS. That’s why momentum toward IFRS adoption has been steadily building, even before it’s required. </li></ul>
    16. 16. To Adopt or not to Adopt? That is not the Question <ul><li>IFRS is being driven by the globalization of capital markets. Not just by government policy. </li></ul><ul><li>“ Every business will have a different outlook on IFRS, but no matter what your approach, know this: The full transition will take a well planned effort, requiring leadership and vision. For many companies, it will take at least three years .” </li></ul><ul><ul><li>Deloitte </li></ul></ul>
    17. 17. USD Spent in Millions on IFRS Conversion Company Revenues Company Revenues USD Spent in Millions on IFRS Conversion The amount of estimated spend on IFRS varies widely within each category of company size, with some companies in the same size category expecting to spend far more than their peers.   $23.2M $27.1M $48.5M $131.9M $160.9M $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 $160.0 $180.0 $1 Billion to $4.9 Billion US $5 Billion to $9.9 Billion US $10 Billion to $19.9 Billion US $20 Billion to $49.9 Billion US $50 Billion US or more 0.731% 0.200% 0.141% 0.103% 0.298% 0.000% 0.100% 0.200% 0.300% 0.400% 0.500% 0.600% 0.700% 0.800% $1 Billion to $4.9 Billion US $5 Billion to $9.9 Billion US $10 Billion to $19.9 Billion US $20 Billion to $49.9 Billion US $50 Billion US or more Source: Accenture 2008 IFRS Survey Source: Accenture 2008 IFRS Survey
    18. 18. All Stages: Apply Policy and Control Management Determine impact on accounting in subsystems Configure accounting rules and set up ledgers Process and report using dual accounting Milestone 3 Transactions Recorded in Multiple GAAPs Stage 3 Record Transactions in both GAAPS Milestone 1 Completed Preliminary Study Stage 1 Study Impact & Determine Strategy Perform Preliminary Study Assess Impact Determine Strategy Determine changes to business model Transform operations using IFRS results Report IFRS results, increase shareholder value Stage 4 Transform Your Business & Win with IFRS Milestone 4 Business Model Optimized Collect GAAP Financial Results Adjust and Consolidate Under GAAP & IFRS Report, Reconcile and Audit Results Milestone 2 IFRS Reports Produced Stage 2 Enable Top End Reports
    19. 19. IFRS – The Big Impacts <ul><li>Upstream systems </li></ul><ul><ul><li>Additional reporting requirements in areas such as taxes, financial instruments, and fixed assets. </li></ul></ul><ul><li>General ledger </li></ul><ul><ul><li>Changes to the chart of accounts. During transition, general ledger reporting will likely need to accommodate ledgers for both U.S. GAAP and IFRS. </li></ul></ul><ul><li>Reporting data warehouse </li></ul><ul><ul><li>Changes in data models, such as valuation systems and actuarial models. </li></ul></ul><ul><li>Downstream reporting </li></ul><ul><ul><li>Changes to the number of consolidated entities, mapping structures, and financial statement reporting formats. </li></ul></ul>
    20. 20. Next Steps <ul><li>IFRS Gap Analysis - The first step in the journey is to conduct an IFRS diagnostic to assess the impact conversion will have on your business. </li></ul><ul><li>Get clear about how IFRS and U.S. GAAP differ. Determine the level of effort required to address the differences. </li></ul><ul><li>Evaluate the impact on accounting policy. Some areas of accounting will require new policies due to clear differences in standards. In other areas, there may or may not be differences, depending on the choices you make. </li></ul><ul><li>Inventory your current IFRS reporting requirements and locations. </li></ul><ul><li>Identify resources within your organization to assist in the IFRS effort. </li></ul>
    21. 21. Next Steps (con’t) <ul><li>Assess the impact of IFRS on your technical infrastructure. Front-end systems, general ledgers, sub-ledgers, and reporting applications may need to be evaluated. </li></ul><ul><li>Identify the impact on current system projects. As new projects are planned, take time to align requirements with the likely impact of IFRS </li></ul><ul><li>Identify stakeholder groups affected by IFRS. Assess their current level of understanding of what’s ahead. </li></ul><ul><li>Create a plan to address the training and communication requirements for each stakeholder group. Keep people informed through the entire journey. Take time to celebrate success. </li></ul>
    22. 22. Why HFM to Handle IFRS? <ul><li>Centralize data – one version of the truth – accessed via the web </li></ul><ul><li>HFM can support multiple accounting standards (U.S. / CDN.-GAAP, IFRS, and so forth) </li></ul><ul><li>HFM provides validations and controls over the process </li></ul><ul><li>HFM can accommodate multiple data sources </li></ul><ul><li>HFM can handle the collection of both financial and non-financial metrics </li></ul><ul><li>HFM can handle different CoA’s </li></ul><ul><li>HFM can handle alternate organizational structures </li></ul><ul><li>HFM can handle & consolidate multicurrency translations </li></ul><ul><li>HFM has a lot of flexibility in writing business rules </li></ul><ul><li>Twelve smart dimensions to handle all your data requirements </li></ul>
    23. 23. Why HFM to Handle IFRS? (con’t) <ul><li>HFM has out of the box intercompany elimination functionality </li></ul><ul><li>Web architected / Designed for the internet / Highly scalable </li></ul><ul><li>Dynamic reporting / Excel addin (Smartview) </li></ul><ul><li>HFM’s ability to “slice and dice” information facilitates the segmental reporting requirements in IFRS </li></ul><ul><li>Robust controls and audit trails that help with Sarbanes-Oxley compliance </li></ul><ul><li>A vital requirement of an IFRS compliant consolidation model is to be able to roam between results in different GAAP's and report them side-by-side together with the reconciling differences between them. Reports such as this can be readily generated on demand in Hyperion Financial Management by utilizing its customizable multi-dimensionality. </li></ul>
    24. 24. IAS/IFRS Compliant Processes
    25. 25. IAS/IFRS Compliant Processes
    26. 26. Why HFM to Handle IFRS? (con’t) <ul><li>Multi-GAAP reporting compares results and quantifies the differences. </li></ul>HFM has been used for multi-GAAP reporting for years. KPI’s can be executed on any piece of data Source: Oracle
    27. 27. Why HFM to Handle IFRS? (con’t) <ul><li>HFM’s data entry and production reporting can expand dynamically in response to any changes to the chart of accounts, IFRS requirements, or group structure. </li></ul><ul><li>More than 1,500 companies worldwide have adopted Oracle Hyperion Financial Management to address their global financial consolidation and reporting requirements, and half of these customers have upgraded from Hyperion Enterprise. </li></ul><ul><ul><li>These companies have achieved a number of benefits, including: </li></ul></ul><ul><ul><ul><li>Faster period-end closing and reporting cycles </li></ul></ul></ul><ul><ul><ul><li>Improved internal and external transparency </li></ul></ul></ul><ul><ul><ul><li>Reduced compliance costs </li></ul></ul></ul><ul><ul><ul><li>High return on investment </li></ul></ul></ul><ul><ul><ul><li>Efficient multi-GAAP reporting for the transition to IFRS </li></ul></ul></ul>
    28. 28. <ul><li>Multidimensionality becomes particularly vital when navigating the complexities of segment reporting, as required by IAS 14: Segment Reporting. </li></ul>Source: Oracle
    29. 29. Impact on HFM Applications <ul><li>Based on your specific IFRS requirements, how will this impact your HFM apps? </li></ul><ul><li>The key areas to consider are: </li></ul><ul><ul><li>Create a new application </li></ul></ul><ul><ul><ul><li>would include new accounts, new rules, new reports… </li></ul></ul></ul><ul><ul><li>Use a custom dimension </li></ul></ul><ul><ul><ul><li>like a data type – start off with GAAP and adjust it to IFRS </li></ul></ul></ul><ul><ul><li>Use a new set of accounts </li></ul></ul><ul><ul><ul><li>most of the base would be the same </li></ul></ul></ul><ul><ul><ul><li>may need more detailed accounts in some areas </li></ul></ul></ul><ul><ul><ul><li>new parent accounts would be required </li></ul></ul></ul><ul><ul><li>Use new entities – depends on consolidation complexity </li></ul></ul>
    30. 30. Impact on HFM Applications <ul><li>Adjust your current reports </li></ul><ul><li>Adjust your XBRL reporting – new taxonomies </li></ul><ul><ul><li>Disclosure management </li></ul></ul><ul><li>Adjust your FDM apps </li></ul><ul><li>Know the impact of your decision on your application </li></ul><ul><ul><li>The choice to build this in you customs, accounts or entities may depend more on the application you have. </li></ul></ul><ul><ul><li>Chris Barbieri, Ranzal has some great metrics to help guide your decision. </li></ul></ul>
    31. 32. Custom Example for HFM
    32. 33. Closing Remark <ul><li>“ You’ll need plenty of runway. You’ll have to provide comparative financials during conversion—and deal with all the systems, process, and organizational issues surrounding the transition. It will take time. And it will ultimately require your signature.” </li></ul><ul><ul><li>Deloitte </li></ul></ul>Source: Deloitte – Straight Talk Book No. 11
    33. 34. [email_address] Special thanks to Chris Barbieri and Rob Dessureault

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