Tuesday Oct 09, 2012

Oracle OpenWorld Recap - A Walk in the Clouds (and heat in San Francisco)!

Whether you were one of the 50,000 attendees in San Francisco or one of the million+ online attendees – we’d like to thank you for joining us at Oracle OpenWorld last week! With temperatures in the 80s and 90s, attendees traveled the overheated streets to join packed keynotes and general sessions – all to find the information they came in search of – Oracle solutions to address their business requirements and challenges.

The buzz of this year’s OpenWorld was all about ‘The Cloud’. And, the financial management team joined in the cloud buzz with Thomas Kurian’s keynote which highlighted our ERP Cloud Service as the most complete cloud service on the market. Offering the full breadth of business operations, including Financial Management, Risk and Control Management, Project Portfolio Management, Procurement, Sourcing, and Inventory Management, Oracle ERP Cloud Service transforms the back office into a collaborative, efficient, and intuitive hub. And, our product marketing expert on Financial Management, Annette Melatti, provided a glimpse of what the office of finance looks like in the 21st century as well as shared what’s next for Oracle’s financial solutions discussing the future of Financial Management with Fusion Financials, E-Business Suite, PeopleSoft and the JD Edwards solutions. There were over 120 sessions from customers, partners, and Oracle experts that addressed financial management solutions along with demo pods and Meet the Experts sessions. We hope you found what you were looking for! Missed any of the keynotes or general sessions? Watch them on demand here.

At OpenWorld, we also announced that Lending Club, the leading platform for investing in and obtaining personal loans, has selected Oracle ERP Cloud Service to help improve decision-making, implement robust reporting, and take advantage of the cost savings provided by the cloud. The CFO of Lending Club, Carrie Dolan had mentioned that they “are an innovative, data-intensive, high-growth company and needed a solution and partner that could match us. We conducted a thorough review of our options, and Oracle ERP Cloud Service was the clear winner in terms of capabilities and business value as well as commitment to us as a customer.” Read the entire release here.

For now, it’s back to business as we gear up for the second half of our fiscal year and start planning for Oracle OpenWorld 2013!

Thursday Sep 27, 2012

Oracle OpenWorld - 3 Days and Counting!

If you haven’t set your schedule for OpenWorld yet, here’s your chance to reserve a seat at some of the key Financial Management sessions. There’s over 120 sessions specific to our Financials audience that will not only focus on Oracle’s financial product lines, but will also discuss controls and compliance, as well as analytics, budgeting/planning, and financial reporting and the close process. For a complete list of sessions, view any of the Focus on Documents located on the OpenWorld site.

Key Sessions:

Day

Time

Session

Location

Monday

3:15

Oracle Fusion Financials: Overview, Strategy, Customer Experiences, and Roadmap

Moscone West - 2003

Monday

3:15

Oracle Financials: Strategy, Update, and Roadmap

Moscone West - 3006

Tuesday

11:45

General Session: What’s Next for Financial Management Solutions at Oracle?

Moscone West - 3002/3004

Tuesday

1:15

Exploring Oracle Preventive Controls Governor’s Features Through Real-Life Examples

Palace Hotel - Presidio

Weds

10:15

Oracle Hyperion Enterprise Performance Management: A Bridge to Oracle Fusion Financials

Palace Hotel - Concert

Weds

1:15

Oracle Fusion Financials Coexistence with Oracle E-Business Suite

Moscone West - 2011

Weds

3:30

McDonald’s Adopts Financial Analytics to Increase Business Performance

Moscone West - 2011

Thursday

12:45

User Panel: Reducing Upgrade Errors and Effort While Improving Compliance Palace Hotel

Palace Hotel - Presidio

Tuesday Sep 18, 2012

Don't Miss The OpenWorld Session: The Impact of the Upcoming Revenue Recognition and Lease Accounting Changes

Would you like to learn more about Revenue Recognition and Leases Accounting changes from subject matter experts?

Would you like to better prepare your organization for the upcoming changes?

If yes, then it's not too late to register for OpenWorld 2012 and meet Christopher Smith and Ashima Jain from PwC as well as our resident accounting expert, Seamus Moran, who will be presenting at Session 9462: The Impact of the Upcoming Revenue Recognition and Lease Accounting Changes.

Here are the details about this session:

Date: Oct. 1, 2012 

Time: 10:45-11:45 a.m

Place: Moscone West Room 2005

Abstract: With the new revenue recognition rules expected to be issued this year and the lease accounting rules expected to be issued next year—both expected to be applied retroactively—businesses all around the world face many changes until the effective date of these proposed standards. In this session, learn from PricewaterhouseCoopers on the potential impact on accounting, processes, and systems and hear from Oracle about the proposed updates to Oracle E-Business Suite to assist you in assessing the impact on existing contracts, technology, and processes.

Thursday Sep 13, 2012

The 2012 Gartner-FEI CFO Technology Survey -- Reviewed by Jeff Henley, Oracle Chairman

Jeff Henley and Oracle Business Analytics VP Rich Clayton break down the findings of the 2012 Gartner-FEI CFO Technology Survey.  The survey produced by Gartner gathers CFOs perceptions about technology, trends and planned improvements to operations.  Financial executives and IT professionals can use these findings to align spending and organizational priorities and understand how technology should support corporate performance. 

 

Listen to the webcast with Jeff Henley and Rich Clayton - Watch Now »

Download the full report for all the details -   Read the Report » 

     

Key Findings

  • ·        Despite slow economic growth, CFOs expect conservative, steady IT spending.
  • ·        The CFOs role in IT investment has increased again in 2012.
  • ·        The 45% of IT leaders that report to the CFO are more than report to any other executive, and represent an increase of 3%.
  • ·        Business analytics needs technology improvement.
  • ·        CFOs are focused on business analytics and business applications more than on technology.
  • ·        Information, social, cloud and mobile technology trends are on CFOs' radar.
  • ·        Focusing on corporate performance management (CPM) projects, 63% of CFOs plan to upgrade business intelligence (BI), analytics and performance management in 2012.
  • ·        Despite advancements in strategy management technologies, CFOs still focus on lagging key performance indicators (KPIs) only.
  • ·        A pace-layered strategy for applications is needed (92% of CFOs believe IT doesn't provide transformation/differentiation).
  • ·        New applications in financial governance rank high on improving compliance and efficiency.

Thursday Sep 06, 2012

2013 U.S. GAAP Financial Reporting Taxonomy Available for Public Review and Comment

FASB recently released the proposed 2013 U.S. GAAP Reporting Taxonomy. Comments are due October 29, 2012 to be finalized and published early 2013. 

The proposed 2013 U.S. GAAP taxonomy and instructions on how to submit comments are available at the FASB’s XBRL page.

In previous blog entries, I talked about how Oracle Hyperion Disclosure Management supports the latest taxonomy, enabling financial managers to easily comply with the latest filing requirements. The taxonomy is a list of computer-readable tags in XBRL that allows companies to annotate the voluminous financial data that is included in typical long-form financial statements and related footnote disclosures. The tags allow computers to automatically search for, assemble, and process data so it can be readily accessed and analyzed by investors, analysts, journalists, and regulators.

You do not have to have Oracle Hyperion Financial Management, used for consolidating financial results, to generate XBRL. You just need Oracle Hyperion Disclosure Management to generate XBRL instance documents from financial applications, such as Oracle E-Business Suite, Oracle PeopleSoft, Oracle JD Edwards EnterpriseOne, and Oracle Fusion General Ledger.

To generate XBRL tags and complete SEC filings using your existing financial applications with Oracle Hyperion Disclosure Management, here are the steps:

  1. Download the XBRL taxonomy from the SEC or XBRL Website into Hyperion Disclosure Management to create a company taxonomy.
  2. Publish financial statements from the general ledger to Microsoft Excel or Microsoft Word.
  3. Create the SEC filing in the Microsoft programs and perform the XBRL tag mapping in Oracle Hyperion Disclosure Management.
  4. Ensure that the SEC filing meets XBRL and SEC EDGAR Filer Manual validation requirements.
  5. Validate and submit the company taxonomy and XBRL instance document to the SEC.

Get more details about Oracle Hyperion Disclosure Management.

Thursday Aug 30, 2012

Drinking Our Own Champagne: Fusion Accounting Hub at Oracle

A guest post by Corey West, Senior Vice President, Oracle's Corporate Controller and Chief Accounting Officer

There's no better story to tell than one about Oracle using its own products with blowout success. Here's how this one goes.

As you know, Oracle has increased its share of the software market through a number of high-profile acquisitions. Legally combining companies is a very complicated process -- it can take months to complete, especially for the acquisitions with offices in several countries, each with its own unique laws and regulations. It's a mission critical and time sensitive process to roll an acquired company's legacy systems (running vital operations, such as accounts receivable and general ledger (GL)) into the existing systems at Oracle.

To date, we've run our primary financial ledgers in E-Business Suite R12 -- and we've successfully met the requirements of the business and closed the books on time every single quarter. But there's always room for improvement and that comes in the form of Fusion Applications. We are now live on Fusion Accounting Hub (FAH), which is the first critical step in moving to a full Fusion Financials instance.

We started with FAH so that we could design a global chart of accounts. Eventually, every transaction in every country will originate from this global chart of accounts -- it becomes the structure for managing our business more uniformly. In conjunction, we're using Oracle Hyperion Data Relationship Management (DRM) to centralize and automate governance of our global chart of accounts and related hierarchies, which will help us lower our costs and greatly reduce risk.

Each month, we have to consolidate data from our primary general ledgers. We have been able to simplify this process considerably using FAH. We can now submit our primary ledgers running in E-Business Suite (EBS) R12 directly to FAH, eliminating the need for more than 90 redundant consolidation ledgers. Also we can submit incrementally, so if we need to book an adjustment in a primary ledger after close, we can do so without re-opening it and re-submitting. As a result, we have earlier visibility to period-end actuals during the close.

A goal of this implementation, and one that we successfully achieved, is that we are able to use FAH globally with no customization. This means we have the ability to fully deploy ledger sets at the consolidation level, plus we can use standard functionality for currency translation and mass allocations. We're able to use account monitoring and drill down functionality from the consolidation level all the way through to EBS primary ledgers and sub-ledgers, which allows someone to click through a transaction appearing at the consolidation level clear through to its original source, a significant productivity enhancement when doing research. We also see a significant improvement in reporting using Essbase cube and Hyperion Smart View. Specifically, "the addition of an Essbase cube on top of the GL gives us tremendous versatility to automate and speed our elimination process," says Claire Sebti, Senior Director of Corporate Accounting at Oracle.

A highlight of this story is that FAH is running in a co-existence environment. Our plan is to move to Fusion Financials in steps, starting with FAH. Next, our Oracle Financial Services Software subsidiary will move to a full Fusion Financials instance. Then we'll replace our EBS instance with Fusion Financials. This approach allows us to plan in steps, learn as we go, and not overwhelm our teams. It also reduces the risk that comes with moving the entire instance at once. Maria Smith, Vice President of Global Controller Operations, is confident about how they've positioned themselves to uptake more Fusion functionality and is eager to "continue to drive additional efficiency and cost savings."

In this story, the happy customers are Oracle controllers, financial analysts, accounting specialists, and our management team that get earlier access to more flexible reporting. "Fusion Accounting Hub simplifies our processes and gives us more transparency into account activity," raves Alex SanJuan, Senior Director, Record to Report Strategic Process Owner. Overall, the team has been very impressed with the usability and functionality of FAH and are pleased with the quantifiable improvements. Claire Sebti states, "Our WD5 close activities have been reduced by at least four hours of system processing time, just for the consolidation group."

Fusion Accounting Hub is an inspiring beginning to our Fusion Financials implementation story. There's no doubt it's going to be an international bestseller!

Corey West, Senior Vice President
Oracle's Corporate Controller and Chief Accounting Officer

Tuesday Aug 21, 2012

What’s Next from the Standard Setters?

I met up with Seamus Moran, our resident accounting expert, to get an update on the things we can expect to come down the pike in the ever changing world of standard settings.  Several things have derailed recently; the SEC has been dithering; their staff is negative on the adoption of IFRS, and FASB made a decision to proceed with asset impairment differently than IASB.

However, we’ve still got two of the biggest accounting changes coming full steam for arrival next year: Revenue Recognition and Lease Accounting.

  • Revenue Recognition replaces the notion of deferred revenue liability – sales invoices you can’t book to the P&L until contingencies are lifted – with performance obligation liabilities – the items you owe to customers valued at estimated selling prices.  It also replaces the notion of revenue as items billed without any contingencies with the notion of revenue as items for which you have satisfied your customers valued at what you are entitled to receive.  It’s difficult to fathom the implications of these definition changes in terms of bookkeeping, process, and substantiation.  For some, it may not be a major difference, for most, it will be difficult.
Revenue will be finalized in the spring of 2013.  The changes will hopefully simplify the most recent Exposure Drafts in the area of transition reporting, disclosure, and the cell phone example.  But the new standard will impact all US registrants under US GAAP.  And it impacts all non-US registrants under IFRS.
  • Lease Accounting abolishes operating leases and adjusts the math and the way in which leases are expensed.  Real Estate professionals are already anxious about the change, anticipating the complexity it brings to landlords, developers and tenants.  Equipment renters, although not nearly as tuned-in, will also be highly impacted. It will affect equipment rentals from jet aircraft through photocopiers, panel vans, etc. that are currently treated as operational leases but will soon be accounted as capital leases--complete with the right of use assets and complex liabilities, hitting the P&L in a new way with amortization expense above the line and interest expense below. 
Lease Accounting is slated to be finalized in the fall of 2013.  A new exposure draft (ED) will be published this winter with a 120 day review and comment period. This ED is expected to meet the General Acceptance criteria with changes impacting all US registrants under US GAAP and non-US registrants under IFRS.


When will the Revenue Recognition and Lease Accounting Changes be Effective?

It is difficult to say.  Originally, the Boards had announced that the standards would not be effective before June 2015. Although they have not publicly revised the date, practically speaking, that date can no longer be achieved.

It is important that the SEC, FASB, IASB, and registrants and users have time to gather, aggregate and report the necessary data. Software vendors, such as Oracle, need appropriate time to discuss the changes with their customers across various industries, along with the Big 4. And then software vendors need time to design and revise their software, and customers need to implement the changes to their accounting software. The SEC, FASB and IASB are aware of this, and they have discussed it with vendors in the software industry; they intend to reflect the industry’s input in their scheduling. Currently, it is anticipated that the standards will be effective for new transactions in 2016 and/or 2017.  As usual, both standards will require reporting of the several years prior to the effective date under the new standard, although companies will have already reported it under the old standard.  Details of this requirement are among the issues being re-deliberated and are not finalized.

Financial Reporting of the Banking Industry

The Boards are also working on how best to report the activities and status of banks.  These issues are complicated by the fact that the FASB & IASB are concerned with how Banks report to their owners (the stock holders) while bank regulators are concerned with evaluating safety in terms of both the economy and the individual depositor.  With the many recent crisis’, apparently safe bankers’ assets (financial instruments), such as national debt (government bonds) or secured real estate loans (mortgages) have in fact turned out to be not so safe. The standard bankers’ interest margin is measured in part-percentage points, and defining a financial report that accurately defines a bank’s equity is proving difficult.  This difficulty is compounded by the fact that the banking regulators in different countries have very different philosophies about what is safe and for whom that matters, and the philosophy within a country varies depending on the elected government.

Our Plates Are Full
So I think our hands are full with US GAAP and IFRS at the system level, the accounting level, and at the regulators level.  We don’t need to be dealing with asset componentization this year, next year or the year after: changes to Lease Accounting and Revenue Recognition will be plenty, thank you.

After all of us around the world adopt the changes to Lease Accounting and Revenue Recognition, we’ll be in a better position to work with whatever the SEC decides is an appropriate time and way for the US to join the rest of the world in adopting IFRS.  This means establishing what is truly “Generally Accepted” in both the US and non-US countries.  The SEC staff has proposed a process of “condorsement,” where the FASB would publish IFRS standards as Exposure Drafts of Accounting Standard Updates to the FASB codification.  Other countries have already adopted IFRS using this path, although none had as dense a statement of their existing GAAP as the US does.  Such a process will also expose the IASB to addressing issues addressed under existing US GAAP that are not addressed under IFRS. The SEC have not endorsed nor adopted this proposal; we must wait to see what their considerations might reveal.

In a nut shell, we have our hands full dealing with changes to Lease Accounting, Revenue Recognition, as well as the issues with the financial houses.  We have an unequal system of enforcing compliance, and we don’t have a way to ensure uniform interpretation.  For the time being, our plates are full, so not having a definitive date as to when the US will adopt IFRS or how asset impairment will be dealt with is not a big deal. We can wait and not try to bite off more than we can chew.

Thursday Aug 16, 2012

Financial Management in the Cloud: Is It Right for Your Business?

A guest post by Terrance Wampler, Vice President, Financials Product Strategy, Oracle

In a previous post, we explored the pros and cons of SaaS as compared to the traditional software delivery model. Now, here are some proof points to help you make the decision about moving to the cloud. Start by asking your IT department what they’ve done with cloud services. What worked, and, more importantly, what didn't work? If there was a problem, was it about service levels? Cost negotiation? Or was the provider not good? What they learned can help the success of future projects.

The second thing to consider is your governance model around acquisitions. Will you have to change your policies and your governance of IT procurement if you move to the cloud? Do you have to bring in other players besides IT, maybe a line of business, or is the governance model actually in the acquisition? Is there already a service provider you can leverage?

Here’s a piece that customers don't always think about: Do you have a company asset that you might be able to monetize with cloud services? Not only are you looking at how you acquire cloud services, but you might see cloud services as an opportunity to monetize some intellectual property that you have. You can work with the cloud services provider to make that available and give yourself a better negotiation edge and partnership.

Who will be measuring and monitoring your service level agreements? Do you need a revised process? Different technology? Will another organization do it? How will the results be communicated? How do you audit the process? A cloud service supplier needs to do more than say his service level is great ─ he needs to prove it to you.

Interestingly, the one question that most people tend to save to the end is: Does the product functionally do what I need it to do? Does it actually have good feature sets? It sounds obvious, but we see people missing that one.

When it comes to Fusion Applications, everyone knows that it can be deployed on premise, on demand, and in the cloud — whatever way you want it. The SaaS solution also can be part of a co-existence scenario. You can keep your on premise software, and then over time, move select components to a SaaS model.

As a cloud service provider, Oracle is very well known in the industry. We've been doing this for many years. We have large data centers running our services. We are very good about meeting our service level agreements and have excellent service renewal contracts for our SaaS business. Plus, the financial component of Fusion is a fully functional solution with all the capabilities you would expect it to have and competes well against the biggest ERPs.

At the end of the day, I believe that your evaluation of total cost of ownership is primarily an internal one. We’ve taken the need for comparing different products out of the mix. So think Fusion Applications when you have a strong business case for moving to the cloud.

Related Article: Five Ideas: Finance - What CFOs need to know about cloud and other technology solutions

Friday Aug 03, 2012

What CFOs Should Know About the Cloud

Some enterprise finance functions have been slower to adopt cloud-based computing than other business functions. Is this caution justified?  The cloud is now firmly established in our business vocabulary, yet its appeal is not universal. In broad terms, the finance function has been slower to adopt cloud-based processing than other business functions. But is this unwillingness to take the plunge—or, in some cases, even to dip a toe in the water—fully justified?

Recent research indicates that as the cloud market begins to mature, the primary motive for a move to the cloud is no longer cost (as it was in the early days), but rather the potential for process improvement, often triggered by an impending upgrade or withdrawal of support for a legacy system. However, there is no denying that the transition is challenging as organizations seek to integrate processes that straddle the cloud and on-premise worlds.

So CFOs were probably right to be cautious about the cloud, but now that the market is maturing and larger vendors are offering cloud-based applications, the opportunities for enhanced competitiveness, productivity, and organizational responsiveness are likely to become too tempting to resist. 

Learn more about "What CFOs should know about the Cloud" and other CFO solutions at our C-Central, Information for Executives website.

Featured Resources: 

Thursday Jul 26, 2012

Grab a Sneak Peek at the Financial Management Activities at Oracle OpenWorld

Last chance to SAVE with the Early Bird rate -- Register by July 27th.

Everyone knows Oracle OpenWorld is the best place to find out what’s happening with Financial Management Solutions, who’s making it happen, and how it can work for you.  With over 120 sessions specific to our Financials audience, it’s your chance to learn how you can leverage Oracle technology to deliver the results expected by stakeholders.  These sessions will not only focus on Oracle’s financial product lines, but also discuss controls and compliance, as well as analytics, budgeting/planning, and financial reporting and the close process – all at one conference!

Learn from Oracle Experts, Customers, and Partners

  • Meet and hear from the world’s foremost financial management experts on how to deploy effective finance operations strategies
  • Listen to leading customers describe how they are using Oracle Financial Management Solutions to drive efficiency and manage risk
  • See how our partners have implemented successful financial management solutions to help drive sustainable growth
  • Discover how to leverage Oracle’s complete and integrated Financial Management Solutions to increase shareholder value
  • See Oracle Financial Management Solutions in action at our demo pods
  • Attend one of the many Financial Special Interest Groups to share ideas, discuss challenges, and find solutions

Join the General Session on Tuesday, October 2nd at 11:45 am for a sneak peek at “What’s Next for Financials Management Solutions at Oracle”.  Stay tuned for additional information including session IDs, dates, locations and demos.  For now, here’s a sampling of the sessions around Financial Management:

Fusion Financials
·        CON9424:  Oracle Fusion Financials: Customer Adoption and Experiences
·        CON6850:  How to Score an Eagle on a Par 5: PGA Migrates to Oracle Fusion Applications
·        CON9445:  Information Excess Versus Information Access       
·        CON8849:  Oracle Fusion ERP Case Study: Global Deployment Strategy at Oracle
PeopleSoft Financials 
·        CON9085:  PeopleSoft eSettlements 9.2 & Electronic Invoicing: Drive Down Operation Costs
·        CON9079:  New Work Paradigm: Creating & Using Workcenters in PeopleSoft Financials Release 9.2
·        CON9096:  PeopleSoft Financials Enhancement Town Hall: Interactive Discussion of Ideas
·        CON9095:  Providing PeopleSoft Customers with the Financial Intelligence Needed to Succeed
E-Business Suite
·        CON9478:  Experience Procure-to-Pay Transformation with Oracle Payables Release 12.1 
·        CON9485:  Upgrading to Oracle E-Business Suite Financials 12.1: A Technical Perspective
·        CON9481:  Oracle Payments: The payment process has been redesigned
·        Manage economic challenges and improve cash flow with Financial Analytics for Oracle E-Business Suite
JD Edwards
·        CON9125: Showcase on JD Edwards EnterpriseOne Financial Solutions
Other Sessions of interest
·        CON9560: Hot Topics in Regulatory Reporting - GAAP, IFRS, Sustainability, Solvency II, XBRL
·        CON9372: NEW: Account Reconciliations Module in Oracle Hyperion Financial Close Management
·        CON9387: Advances in Continuous Controls Monitoring with Oracle Fusion Governance, Risk, and Compliance
·        CON9395: User Panel: Reducing Upgrade Errors and Effort While Improving Compliance
Meet the Experts
·        MTE9644:   Meet the PeopleSoft Financials and PeopleSoft Supply Chain Management Applications Experts
·        MTE9645:  Meet the Oracle E-Business Suite Financials Experts
·        MTE9653:  Meet the Oracle Fusion Financials Experts

Find out what’s hot—and why. Only at Oracle OpenWorld. Register by July 27th and SAVE with the Early Bird rate.

Tuesday Jul 17, 2012

Idea of U.S. Companies Adopting IFRS is Over

As I was drinking my triple espresso in the cafeteria and reading yesterday’s article on CFO.com called SEC Staff Pulls Back on Accounting Convergence, I couldn’t believe my eyes. The long-standing issue of converging U.S. GAAP and IFRS was being put on the back-burner, and the FASB wanted to be put in the driver’s seat, instead of IASB.

My first thought was surprise; the SEC Staff seemed so negative. I thought the U.S. was moving forward slowly, but surely, on the path to convergence.

My second thought was: “I wonder what my buddy Seamus Moran, our resident accounting expert, would say about this?”

Then, lo and behold, I look up and see Seamus Moran standing in front of me.

Me: “Hi, Seamus, it seems like the SEC is no longer kicking the can down the IFRS road; they’ve shelved it.”

Here’s what Seamus had to say:

That’s right, Theresa. Last Friday on July 13th the SEC Staff published a report to the SEC Board in which they indicated a reluctance to simply adopt IFRS. In other words, there’s no final decision on whether IFRS should be incorporated into the U.S. financial reporting system and if it were, how it should be implemented.

If the Board of the SEC accepts their Staff’s recommendations, it is anticipated that each IAS and IFRS statement will be “exposed” by the FASB for review by the U.S. GAAP community before it chooses to adopt it to become U.S. GAAP. In this way, FASB will be responsible for the quality of the IFRS standards.

The SEC may adopt another approach, but they have not signaled any to the financial community.  The IASB are hoping for a more positive response.  The issue of quality worldwide accounting standards is a matter of economic and public policy, so many views will be considered.

Many countries have adopted IFRS using this process – the national standard setter works with the IASB, then exposes the standard domestically, and finally adopts it if it meets domestic general acceptance.

What Happens If the Public Do Not “Generally” Accept the Text of an Existing IFRS Principle?

It is back to the drawing board at both the national standard setter (FASB) and international (IASB) levels. In the end, it makes for well thought-out standards, addressing issues across many countries.

However, this does NOT impact the following three sets of major changes that are currently in process for both FASB and IASB:

  • Revenue Recognition
  • Lease Accounting
  • Reporting Activities of Banks

On the topic of Rev Rec, the comment period for the Revenue Recognition Exposures Drafts was completed earlier this year. The drafts were exposed by both the FASB and the IASB under both sets of review conventions. The accounting principle, whose text is shared by both U.S. GAAP and IFRS, is expected to be published next year.

For Lease Accounting, it is due for re-exposure later this year. The Boards have reached consensus on what they believe is generally acceptable with the expectation that a final standard will be published late next year.

Neither standard will be effective before 2015, probably more like 2016, but both have retroactive reporting we can anticipate to begin a year after publication.

Financial reporting of the banking industry continues to be an issue with regulators, governments, Basel III, and both the FASB and IASB. There have been advances in the consensus on financial reporting, but the difficulty in evaluating capital adequacy and safety and contrasting that to the investors’ view remains unresolved.

What Does this Mean for U.S. Company Filers?

In short, U.S. public company filers will not be announcing that they are an IFRS company on a given date. No U.S. company will say “in effect March 31, 20XX, we are an IFRS company.” However, they will be up taking “Revenue from Contracts with Customers” and “Lease Accounting” during the next few years under U.S. GAAP. And after that, you can expect that U.S. companies will adopt common standards with their overseas competitors and peers as FASB exposes the IAS and IFRS statements as ASUs (Accounting Standards Updates) to the U.S. GAAP codification.

What Does this Mean for Non-U.S. Filers?

Non U.S. filers that already use IFRS can expect to uptake “Revenue From Contracts with Customers” and “Lease Accounting” during the next few years as IFRS, and then uptake revisions to IFRS as the Boards work through elements of the existing IFRS literature that fail to meet general acceptance in the U.S.

Any Upside to This?

It means that the SEC, the Government and other authorities will hopefully work together to ensure an even application of the IFRS standards to avoid things like the following:

  • China IFRS versus U.S. IFRS or EU IFRS versus U.S. IFRS
  • Old US GAAP rules as a crutch for IFRS in the U.S. when they are not used overseas, holding ourselves to a more particular standard
  • Particular instances of IFRS, such as the EU carve-out on financial reporting by banks

Tuesday Jun 19, 2012

The Lease Standard Train is Back on Track

As I was walking to the elevator, I ran into Seamus Moran, our resident accounting expert.

Me: “Hi Seamus, where have you been? You don’t write, you don’t call, and you don’t send me flowers. I’ve been hearing more and more about the Lease Accounting topic. It looks like Congress is weighing in on it too and putting heat on FASB.

According to a recent article in Reuters  “representatives Brad Sherman, a Democrat, and Republican John Campbell, have written to the U.S. Financial Accounting Standards Board warning of dire economic fallout from a plan to have companies put leases on their balance sheets."


Here’s what Seamus had to say:

Yes, but there have been some recent developments. The FASB and IASB cleared a logjam, resolved a final “content of the standard” issue, and articulated a way to move forward on Leases last Wednesday.  It looks like the Lease Standard Train is back on track.   We’ve just had a briefing from PwC.

The Lease timeline now looks like this:

  • Now to June 2012: The staff will write up the decisions
  • June 2012: Boards will meet on “logistical” issues (glossed over)
  • Oct, Nov, most likely December 2012: A New Lease Exposure Draft will be crafted
  • January – April 2013: Public Comment period begins
  • April to September 2013: Everyone to digest the comments and draft the final standard
  • End of 2013 (Probably more like Early 2014): Publish the new Lease Accounting Standards
  • 2015: Retroactive reporting
  • 2017: New standard is effective

It seems that leases under one year will be treated as “rent expense”. If it doesn’t cross two (annual) balance sheets, it doesn’t really matter.

This is good news in terms of clarity, resolution, and moving forward on one of the last remaining items to converge the IFRS and U.S. GAAP standards. There are ambiguities, issues, concerns, et cetera, of course, and there are bright lines (“rules”) that bother the “no rules, please” people and ambiguities (“judgments”) that bother the “clarity, please” people, but at least the train isn’t falling off the tracks.

 

Monday Jun 11, 2012

Oracle Apps User Groups Comment on the User Experience for Fusion Applications

Hear first hand from the key Oracle Apps User Group Community members about their take on Oracle Fusion Applications and the advice they are giving to their User Group communities when it comes to Fusion.

Click here to watch the 2 min video. 

Thursday May 17, 2012

Must See Video on Fusion Expenses from a Product Expert

Are you interested in learning about the cool innovations we made to Fusion Expenses?

Please watch the two minute video from Diana Gray, a self-proclaimed mobile geek who helped design Fusion Expenses, talk about why she is excited about her product.

To watch a demonstration of Fusion Mobile Expenses, where you can use your iPhone to enter your expenses on-the-go, click here: Fusion Mobile Expenses Demo

Friday May 11, 2012

Watch the Demo on Fusion Financials' Close Status Monitor

Would you like to see how Fusion Financials allows you to close your books faster by having better visibility about your subledger transactions?

Watch this one minute YouTube video to learn about the Close Status Monitor that identifies things like  which subledgers haven't been closed, what transactions have not been accounted or posted, and more.

 

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Focusing on solutions for the Office of Finance, this blog will highlight key financial management market trends, events and other news of interest.

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