The globalization of capital markets calls for the convergence of accounting standards around the world and today more than 120 countries allow the use of IFRS in one form or another, amongst which the 27 members of the European Union, Australia, Brazil or Canada. Besides, other national accounting standards setters are working closely with the IASB (International Accounting Standards Board) to make their national rules converge with IFRS. This is the case for China and India for instance. In addition the convergence project between US GAAP (United States Generally Accepted Accounting Principles) and IFRS has made significant progress. In terms of electronic disclosure, the IFRS Foundation provides yearly updates of the standard IFRS taxonomy which provides additional guidance to defining the financial statement presentation as stated on their website: “By providing the IFRS Taxonomy, the IFRS Foundation seeks to address the demand for an electronic standard to transmit IFRS financial information.” Moreover at the time of writing this document, Foreign Private Issuers expect a forthcoming approval of the IFRS taxonomy by the U.S. regulator, and the subsequent decision to mandate XBRL for their filings from then on. This will imply complying with level 1 tagging for the first year of XBRL filing, and then complying with the four levels of tagging from the second year, including level 4 which corresponds to detailed tagging of notes. So guess there is work ahead for folk involved in regulatory reporting.
In the March 2012 “Magic Quadrant for Corporate Performance Management Suites”, Gartner® emphasized disclosure management capabilities “should support specific generally accepted accounting principles (GAAP) presentation rules, such as U.S. GAAP or International Financial Reporting Standards (IFRS), to enable the preparation of statutory financial statements with appropriate commentary and supplementary notes. Increasingly, financial-reporting solutions incorporate process controls for reporting and disclosure, such as templates, collaboration between the company and the financial statement publisher, business rules, workflow, and audit trails to better meet regulatory, compliance and governance programs. In addition, they should support financial-reporting technologies, such as eXtensible Business Reporting Language (XBRL), as regulators increasingly require the submission of financial statements in XBRL format.”
Well SAP is already there with SAP Disclosure Management, starter kit for IFRS which has been configured to meet IFRS requirements. Now the good folk who really understand this stuff have produced a 30 page document to guide you what is involved and how it is delivered in the starter kit. They asked me to specifically mention that the document only cover aspects of the accounting standards that relate to disclosures – and it should not be considered as a substitute for a comprehensive reading of IFRS!
There are also a couple of other papers in the series that work through how SAP Business Planning and Consolidation and SAP Financial Consolidation address the reporting requirements of IFRS with detailed examples of every step in the process from consolidation to disclosure.