Automation of IFRS accounting
Expico company has started the QMS project according to ISO 9001 standardsWe have taken another step towards the further development of our enterprise. We are engaged in the reorganization and reengineering of our business processes to improve the quality of our services.
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Our consulting company solves a wide range of tasks for business processes automation based on the 1C technological platform.
These tasks also include process automation of IFRS reporting and managerial accounting in Russia.
What are IFRS standards?
IFRS standards are a universal international tool for preparing financial statements for assessing the activities of companies and making decisions in relation to a company by investors.
While international standards are constantly being modified and supplemented, regulators from different countries seek to bring their local accounting standards to IFRS; in particular, the Ministry of Finance of the Russian Federation has done a lot of work in recent decades to bring RAS (Russian accounting standards) closer to the requirements of international financial accounting (IAS).
For which enterprises in Russia IFRS standards are important?
- Since 2012, banks and insurance companies in the Russian Federation are required to prepare reports not only according to local standards, but also according to IFRS;
- Companies planning IPO must prepare reports in accordance with international standards;
- Russian companies that set a goal to open representative offices outside the country.
- To foreign companies whose branches or representative offices conduct their business in Russia.
What is the automation of accounting in accordance with IFRS?
Accounting under IFRS is a very time-consuming task if this process is not automated. There are two traditional approaches to working with IFRS reporting in Russia:
- The transformational method - when the results of economic activity are transformed to the requirements of international standards - that is, ready-made reports under RAS are adapted to the requirements of IFRS.
- Translation method - when parallel accounting of business transactions is carried out according to different charts of accounts - RAS and IFRS. This makes it possible to analyze business transactions recorded already in accordance with international accounting during the daily business.
Modern accounting systems with IFRS-modules have a functionality of full parallel accounting according to international standards. At the same time, part of the business operations make movements simultaneously on the RAS accounts and on the accounts of IFRS, and some operations are entered only to book operations according to international standards.
Modern 1C systems with IFRS modules can significantly reduce the time it takes to prepare reporting and management accounting to IAS.
What 1C programs do we use to automate accounting in accordance with IFRS?
At present, 1C and partners have developed a number of standard and special industry IT-solutions that automate accounting in accordance with IFRS or other corporate accounting standards other than national ones. They all have their purpose, advantages and disadvantages, but we will consider the main products that you most often encounter in practice:
- «1C: Accounting CORP IFRS» on the market since 2018. This product is an extended version of 1C: Accounting CORP and allows you to keep records in accordance with IFRS both in parallel and through data transmission. The program is ideal for representative offices and small Russian companies that require accounting transformation due to IFRS. The program does not support consolidated IFRS accounting for several legal entities or a group of companies.
- «1C: ERP Enterprise Management 2» - the flagship system of 1C with a modern IFRS accounting module. The main advantages of this module are: operations booking due to IFRS based on operational accounting data and a powerful designer of IFRS reports of any complexity. The first advantage is that there is no need to translate transactions as a separate document at the end of a financial period during the month closing for instance, postings are made, both in accordance with IFRS and local standards, already during the accounting document is booked.
- «1C: Management of Holding 8» - this 1С system, within the framework of IFRS accounting, solves the major task: consolidates accounting and reporting data within a group of companies and has a powerful functional tool for automating reporting consolidation processes. This program can be the core of accounting automation according to international standards and a receiver of data from stand-alone systems of the ERP level in a group of companies.
International business should approach the choice of the optimal automation solution on the 1C platform with particular attention, taking into account the specifics of the business sector, the size of the company and plans for future scaling up. Another important success factor here is the choice of a professional implementing contractor with know-how to adapt the principles of international accounting to the specifics of financial accounting in Russia and the CIS countries.
The company EXPICO has in its portfolio a number of successful projects implementing the IFRS (HGB) based on 1C Platform in large Russian and foreign enterprises, a staff of qualified analysts, consultants, methodologists, accountants and practitioners who speak English and German, which greatly simplifies communication with foreign customers.
If you have a challenge in automating international accounting - contact our specialists! We will analyze and offer you an unbiased, most suitable 1C solution for your business! Naturally, we carry out turnkey projects for accounting automation in accordance with IFRS, and we can also advise your team in this area of automation.