IFRS Accounting with Microsoft Dynamics GP®: Sub-ledger Transaction Level (Part 1)

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This blog begins a 3-part examination of IFRS Accounting: Sub-ledger Transaction Level and the 5 Available Methods of Deployment. First we’ll look at the Sub-ledger Transaction level and take a look at the first available method of deployment, Duplicating Your Database.

Systems capable of sub-ledger transaction level of deployment of IFRS and GAAP are generally more complex systems known as Tier 1 ERP systems. The companies may already be deploying multiple databases, multiple corporations may be slated for conversion to IFRS, the parent company may need to stagger deployment of IFRS throughout multiple international organizations, or a need may exist to continue to report by both IFRS and GAAP beyond the requisite two-year transition period.

Companies with Tier 2 ERP systems such as Microsoft Dynamics® GP may initiate the use of third-party modules or customizations or creative use of existing native GP modules.

Sub-ledgers capable of generating both IFRS and GAAP transactions could likely be:

  • Revenue and expense deferrals
  • Project Management
  • Fixed Asset Management
  • Or any one of a number of third-party job cost or project accounting modules

Available Methods

The Sub-ledger Transaction Level may be deployed by using any one of the five available methods.

Method 1 – Duplicating Your Database.
Method 2 – Addition of a Parallel Set of Accounts
Method 3. Adding a Dimension to Your Existing Chart of Accounts
Method 4. Classifying Transactions by Ledger
Method 5. A Hybrid Approach Combining Two of the Other Methods

Method 1 – Duplicating Your Database

This method keeps the complication of divergence out of the sub-ledgers—GAAP and IFRS transactions aren’t accidentally co-mingled within the sub-ledgers.  This is generally good and makes this option the most popular method.

For most companies, the primary database will initially be based on GAAP.  The second database contains the adjustments to translate the financials to IFRS when the databases are consolidated.

This option also provides the method for financially tracking adjustments from one method to the other—a requirement during the first two years of transition to IFRS.  Simply stated, it is the adjustments that are posted in the second database.

See one of our recent blogs to learn how a Microsoft Dynamics® GP database is duplicated.

Once you have entries in two or more databases, the FRx Report and Management Reporter Designers use what is called “Tree” technology to consolidate the entries into one financial report.  The Designers enable reporting of one or many databases, easily grouping them into a rollup.

The IFRS company, containing adjusting entries, is consolidated with the first company to produce IFRS statements.  Visually the tree is quite simple and appears as follows:


In the next blog we’ll examine IFRS Accounting: Deploying IFRS in Dynamics GP with the Addition of a Parallel Set of Accounts or by Adding a Dimension to Your Existing Chart of Accounts.

©2011, Computeration®, Inc.

Coming soon…our free IFRS white paper. Reserve your copy of  If IFRS is on Your Horizon, What are Your Choices? now..

By Gloria Braunschweig, The IFRS Implementation Expert for Dynamics GP, with Computeration, a Pacific Northwest Microsoft Dynamics GP Partner.

Computeration specializes in ways to enhance your company’s solutions with Microsoft Dynamics GP in Idaho, Oregon, and Southwest Washington, with clients around the world, Computeration makes your implementation successful by offering experienced project management, data integration, training, and consulting services.

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