As we all know, all the customers who are following IFRS / US GAAP accounting standards has to switch to new reporting / accounting process with effect from 1st Jan 2019. All the existing customers who are already using the existing property manager functionality and have their leases running in the Oracle EBS property manager, need to migrate their existing leases from current property manager solution to new IFRS regime. When it comes to transition from current property manager system to compliance accounting, we have 3 available options i.e
Below is the quick overview of each of these options
I. Continue Existing Normalized and AP Accounting or Invoices
Under this, there will not be any calculation of ROU / Liability balances and no interest expenses will be calculated. Under this user will not be selecting any of the compliance related attributes / setups and it will work as current property manager functionality is working i.e accounting entry is generated when AP invoice is created and when normalization entry is interfaced to GL.
II. Generate only Compliance Reports and do not Generate any Accounting from Property manager
Under this approach, using property manager solution, organizations can generate ROU / Liability balances and interest and amortization calculation etc. and they can also generate the reports to extract these balances. But under this approach, there will not be any accounting entry that will get generated / interfaced to GL.
III. Uptake the Multiple GAAP Accounting
Under this approach, customers not only generate the compliance related reports using property manager solution, but also generate the accounting entries required for compliance accounting and also interface them to General ledger.
Note :- Customers who are adopting the Modified Retrospective Approach, need not run Calculation program for previous period in final mode i.e step number 5 in the above flow. They can directly run the calculation program as of transition date with method as "Modified Retrospective".
This parameter is non-mandatory. When you select a value Modified Retrospective Method as the parameter for Method, the system will take into consideration all cash flows on and after 1st day of the transition date period. You can run the above program if you want Modified Retrospective Method numbers only.
Based on Report From Inception flag you can control if you want cash flows from lease commencement to be considered into calculations. This new parameter will help you start calculations from the transition month in contrast to earlier method of resorting to previous month. You can still run Calculate ROU Asset and Liability Balances for each of the previous months for which numbers are needed to be reported. However, the new parameter does not depend/continue those balances into calculation of balances as on 1st day of the transition period. Currently, the parameter can only be used for transition calculations in Final mode only and through a subsequent fix. Draft calculations will also be provided soon.
For more information on each of these options, refer our Info center document 2482062.2 .