Parallel reporting may be created either in the real

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Unformatted text preview: l GAAP to IFRS will require parallel accounting for a certain period of time. At a minimum, this will happen for one year as local GAAP continues to be reported, but IFRS comparatives are prepared prior to the go-live date of IFRS. Parallel reporting may be created either in the real-time collection of information through the accounting source systems to the general ledger or through `top-side' adjustments posted as an overlay to the local GAAP reporting system. The manner and timing of processing information for the comparative periods in real-time or through top-side adjustments will be based on a number of considerations: Parallel accounting option in comparative year Parallel accounting through topside adjustments Effect No real-time adjustments to systems and processes will be required for comparative period. Local GAAP reporting will flow through sub-systems to the general ledger, i.e. business as usual. Comparative period will need to be recast in accordance with IFRS, but can be achieved off-line. Migration of local GAAP to IFRS happens on first day of the year in which IFRS reporting commences. Consideration needed for `leading ledger' in comparative year being local GAAP or IFRS, i.e. which GAAP will management use to run the business. If leading ledger is IFRS in comparative year, then conversion back to local standards is necessary for the usual reporting timetable and requirements. Changes to systems and information may continue to be needed in the comparative year if the IFRS accounting options have not been fully established. Migration to IFRS ledgers needed prior to first day of the year in which IFRS reporting commences. Considerations Less risky for ongoing local GAAP reporting requirements in comparative year. Available for all, but more typical when there is a lower volume of transactions to consider. More applicable to small/less complex organisations or when few changes are required. Real-time parallel accounting Real-time reporting of two GAAPs in comparative year has benefits, but puts more stress on the fin...
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This note was uploaded on 12/03/2012 for the course ACCOUNTING 102-1132 taught by Professor Accountinggroup during the Fall '11 term at Al-Quds University.

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