Tackle Changes to Inventory, Cash Flow, and Benefit Regulations with SAP ERP

by Kehinde Eseyin, Systems Support Manager, TOTAL Nigeria PLC, Nigeria (January 2010)

Review some accounting standard changes, including changes to foreign exchange rates, inventory, and benefits, and see how the SAP ERP system can address them.

Categories: Compliance, Global, IFRS, Regulations

Key Concept

The driver of International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS) is the need to bring uniformity and consistency to accounting practices and reporting across the globe. SAP is conscious of this business need and has continually enhanced and adapted its functionalities to meet the dynamics of global accounting and financial reporting requirements.

The coming changes to financial accounting standards mean that you need to reconsider how SAP ERP software addresses regulatory changes. The most prominent change is International Financial Reporting Standards (IFRS). IFRS is widely based on International Accounting Standards (IAS), but with some changes.

I’ll review how the SAP ERP system can address some elements of IFRS and IAS standards, including:

Financial Instruments: Presentation (IAS 32)
Financial Instruments: Recognition and Measurement (IAS 39)
Financial Instruments: Disclosures (IFRS 7)
Foreign Exchange Rates (IAS 21)
Financial Reporting in Hyperinflationary Economies (IAS 29)
Cash Flow Statement (IAS 7)
Inventories (IAS 2)
Employee Benefits (IAS 19)
Share-Based Payments (IFRS 2)

Some of the functionalities that can help you enhance IFRS compliance include multi-currency support, SAP Hedge Management, SAP Exposure Management, SAP Balance Analyzer, SAP Market Risk Analyzer, SAP Payroll, and SAP Liquidity Planner.

In my previous article, "How SAP ERP Combats the Challenges of Global Accounting and Financial Reporting Standards," I discussed other elements of these standards.

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