Due to the volume of responses and question we’ve been receiving on our IFRS series, we’d like to step back and start with an enhanced version that answers many of your questions.
The first step in analyzing your software systems is to determine the source of transactions and at what point you want to be able to diverge reporting between GAAP and IFRS. Consider a system diagram:
Three layers are considered for determining where you want to start to diverge
IFRS from GAAP:
- Consolidated Financial Report level
- General Ledger level
- Sub-ledger transaction level
Selection of the level where you want to differentiate GAAP from IFRS determines the methods from which you choose to deploy IFRS. The levels are enabled by the various methods.
Available Methods of Deploying IFRS within
- Duplicating your database then adding adjusting entries in the new database
- Adding a parallel set of accounts representing the new ledger to your existing chart of accounts, providing for segment differentiation for the divergent standards. This method increases the number of accounts in your general ledger.
- Adding an Analytical Accounting dimension to your existing ledger accounts. This method doesn’t increase the number of accounts in your general ledger, but does add another dimension that must interface with your financial report writer, FRx or Management Reporter.
- Classifying transactions by ledger within your existing chart of accounts—in Microsoft Dynamics® GP, a method in addition to adding a dimension. This method could be termed to add an attribute to each transaction.
- A hybrid approach combining two of the other methods.
Over the next few blogs we’ll examine various methods and levels combined, starting with IFRS Accounting: Consolidated Financial Report Level.
©2011, Computeration®, Inc.
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By Gloria Braunschweig, The IFRS Implementation Expert for Dynamics GP, with Computeration, a Pacific Northwest Microsoft Dynamics GP Partner.
1 thought on “IFRS Accounting with Microsoft Dynamics GP®: Where Do You Start?”
we have GP 2010 which generates GAAP reports. We are aiming to achieve IFRS reporting on the same platform besides our GAAP.
All we need to achieve is issues IFRS reporting without adding extra work on our accountants. Looking at option 3 in your article it seems like a possible solution.
Please let me know what you think