IFRS and PeopleSoft

Although the transition to global IFRS adoption will have its challenges, it will also bring considerable benefits. IFRS is intended to improve transparency and comparability in global markets.

PeopleSoft Financial Management has been addressing IFRS requirements for many years. PeopleSoft customers in more than 100 countries are currently reporting according to IFRS with PeopleSoft Financial Management. In fact, PeopleSoft has had customers who have been reporting using IFRS since release 8.4.

As organizations begin to evaluate the impact of IFRS on their accounting practices, PeopleSoft Financial Management customers will find familiar features that support IFRS, as well as features developed specifically for IFRS. With proper planning in concert with accounting compliance advisors, customers can identify and exploit the features available in PeopleSoft Financial Management needed to assist with the transition to IFRS.

ORACLE PEOPLESOFT CAPABILITIES TO SUPPORT IFRS

IFRS-Specific Features

There are a number of areas where specific functionality was developed to support IFRS requirements. For example:

  • Asset Impairment Worksheet: Accelerated method of depreciation for physical assets or asset write-off for non-tangible assets and impairment worksheet.
  • Parent-Child Net Book Value Component: Allows users to review the net book value of the Parent Asset alone or with the total of some or all of its Child Assets.

Dual GAAP Reporting

Dual or multiple GAAP financial reporting will be required during the comparative reporting period of the IFRS transition. Depending on the complexity of the change from GAAP compliance to IFRS compliance, the differences can be managed in a variety ways. For example:

  • Minimal to Low Impact: For some customers, IFRS will have a minimal to low impact. These customers will configure their subsystems to generate the appropriate data. These customers can use a Multiple Ledger approach to distinguish between IFRS and GAAP. Through this approach they can define ledgers to suit the organizations structure - address common elements in one ledger, group adjustments in a second, local adjustment in a third ledger - then report by grouping the ledgers as appropriate.
  • Medium Impact: For many customers, IFRS will impact several areas. For these customers, a solution involving ledgers and adjusting ledgers will be more appropriate. Customers can use Book Code to handle multiple GAAP requirements within the ledger and produce reports for Local GAAP and IFRS.
  • High Impact: For some customers, the impact of IFRS adoption will be significant. These customers would choose to use completely separate ledgers, one for GAAP and one for IFRS. Multiple ledgers are best suited to reflect a significant change in business model

IFRS Migration Path

After the comparative period, given the options for dual GAAP reporting, customers will have an appropriate path to get to IFRS-only reporting. Considerations at the point of migration include the business response to IFRS and the evolution of the regulatory environment.

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