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implementing Oracle General Ledger Who prepares the annual statutory returns at present? If the books are prepared by a third party such as an auditor it is common for them to just download your Trial Balance into their own system and make the necessary journal adjustments in there. If this arrangement is working well and they offer good value for money then there is little justification for moving the statutory books onto Oracle. However, if they are expensive, or raise numerous concerns about the auditability of the accounts then they should be engaged to help shape the use of statutory books on Oracle. Is there a requirement to use a particular certified system to maintain the statutory books or can they be prepared in a spreadsheet? If the statutory books have to always undergo final preparation in a third party statutory system then there is little point in having a Oracle statutory book unless there are significant differences in day to day transaction processing between management & statutory accounts. ( More on this below ). If you are free to use any method or system you wish as long as the end result is in a certain format and auditable then this is a good pointer to using Oracle. List the end of year adjustments that need to be made to turn management books into statutory books. For each adjustment please provide a brief description on how this is derived. Typically this may involve the following: Bad Debt: Typical differences are fixed % of total debt or only recognising debt over 6 months as bad debt. This is normally a quick calculation and a two line journal. Goodwill & Intangibles: There are many different interpretations of this. May just involve moving it from the balance sheet and expensing full cost. This is not usually complex as most companies have few goodwill/intangible assets. Depreciation: Difference between what is allowed for management and statutory reporting. This can be one of the more complex journal adjustments to make as the statutory depreciation is normally a large complex spreadsheet. Are there any differences between management & statutory books in how day to day transactions are treated? This is quite rare as a requirement, but Oracle does provide the ability to split every transaction into different accounting events so for example an AP Invoice can be treated differently in the statutory books compared to the management books. This is a product called 'global accounting engine' ( Also known as 'AX' ). They recommend that it is used for alot of countries in Southern Europe where they have very codified accounting systems. If you can think of any examples of regular transactions that need different treatment then please list them here. Is the financial year end different to the management accounting year of May-Apr ?
If a statutory chart of accounts is needed then you will need a separate statutory book. with each entry having a unique. or that they require certain items to be treated in specific ways on the key reports. sequential & gapless sequence number. Please list all the required key reports. along with a brief description. This is different to the authorities just having a recommended layout for the P&L & BS as described below because often you will find that the management chart of accounts has alot more detail than is required in the statutory reports. That the authorities have either specific layout and detail. and describe the reports in any way you wish. such as Italy and some in Eastern Europe require a large report listing every transaction in chronological order for the whole year. This is used as a printed audit trail had has to be kept for several years to support the key reports submitted to the authorities. What Transaction level reports are needed for Statutory reporting? Some countries.Listing of every journal head in you General Ledger . As long as the detail you require exists as an account balance we can group. then sharing a management & statutory calendar offers the opportunity to make statutory adjustments in one of the 'adjusting periods' in your management books. but can provide for the needs of basic statutory report without a separate book. present. or some addition level of detail to be captured then please provide detail on an additional spreadsheet if needed.xls ) or scanned pictures of the actual statutory reports submitted for you last financial year. BS & Trial Balance ) ? This is the most likely requirement. If the local authorities do require either statutory chart of accounts. This is so that for every company the authorities see the same list of account values and the same level of detail in the P&L & Balance sheet. then you can use the existing local segment (5) in the chart of accounts to capture it. with a brief description and if possible provide soft copy ( pdf . in which you can produce the required reports by combining your management accounts into single lines on the reports. These get reversed the following month. From a Oracle point of view it does not matter if you use the management books or statutory books to produce these reports. However if you are planning on using Oracle. Please list any such reports that you need to provide or have available at a transaction detail level. specific requirements of each and an example from your previous financial year. If the calendars are different and you want to use Oracle then a separate statutory book is needed.If you are planning on maintain a third party system for statutory reporting then this is not important. Some examples from other countries include : . What key account balance reports are required for statutory reporting? ( P&L. Do the local authorities require a specific chart of accounts to be used? Some countries such as France require that a specific chart of accounts is used in the statutory books. If it is just some additional detail.
description. Is a Statutory Asset Register Required ? If one is required then this is a good pointer to having a GL statutory books. However when you factor in the journal adjustments that would need to be made to the offline statutory books it starts to look quite complex to maintain offline. are they small and is it possible to get a dispensation from Central finance to use the statutory rates in the management books ? . MLS/NLS is not used ) then there is still the ability to create FSG reports with local language descriptions & headers. How do you know if you need a statutory asset register ? . just being used to get annual depreciation summary reports.Listing of every accounting entry in date order. What Are The Language Requirements For Statutory Reporting? Even if the Oracle database is limited to English ( ie. Balance Sheet & Trial Balance. . If this is a requirement then please indicate which reports are required in a local language.If yes.If you have less than a 200 hundred assets and want to maintain a statutory register then you should consider using Excel for this purpose . In most cases these do not require a separate statutory book as they are purely transaction based. Also please note that the production & maintenance of these reports would be the responsibility of the local offices with informal support from the Oracle project. . This would include P&L.Monthly / Quarterly Tax reports.Are there differences between Mgnt & Stat depreciation methods ? ..Asset register with cost. It is not essential as the asset register could be stand alone and not post to any GL. but some countries have very specific requirements on for example the use of sequence numbers. . and it is necessary to use the Oracle 'Global Accounting Engine' mentioned above. . date of purchase & tag numbers.Is the calculation method complex or significantly different to exclude the use of a spreadsheet for the statutory depreciation calculations.If the differences are large then there is an argument to having a stat register as you may be able to make tax savings by taking advantage of special depreciation allowances & write-offs.