Many of our multi-national clients have the same challenge – local reporting on one accounting standard (normally local GAAP); group reporting (normally a flavour of IFRS) on another; as well as specific reporting requirements for regulators in certain verticals.
The difference between accounting standards can be summarised as follows:
- Differences in report definitions (for example, the balance sheet may be presented in an different order, granularity or definitions); and
- Differences in accounting policy (say development cost may be expensed under one standard and capitalised under another).
From my experience as an auditor, report definitions should be treated as an integral part of a company’s financial reference data, as they are one of the major reasons for material disclosure errors. Oracle Hyperion Data Relationship Manager (DRM) is a dedicated financial metadata management tool that we have implemented successfully at our clients to govern metadata and report definitions.
Historically differences in accounting policies are normally tackled by using adjustment ledgers or separate ledgers. This often introduces a governance problem, in that different subsets of a chart needs to be shared across multiple ledgers, and kept aligned.
Oracle Hyperion DRM is adept at defining these types of business rules and controlling the complete ERP metadata. It is application independent and can therefore integrate with ERP’s from any vendor. We have found it to be a very useful and flexible tool to manage multiple accounting and reporting standards, as well as many other historically challenging scenarios.