SAP IFRS

High Standard in Financial Statements: SAP IRFS

What is SAP IFRS?

Financial reporting is very important for every business and should be done with high accuracy and in accordance with established standards/regulations. IFRS (International Financial Reporting Standards) are a set of accounting standards developed by the International Accounting Standards Board (IASB), an independent, not-for-profit organization.

It was developed to provide a framework that can be used globally by companies to prepare their financial statements. SAP offers a solution that can follow multiple accounting systems in parallel using the financial ledger structure. In addition to VUK and IFRS, other accounting recording systems (such as CMB, GAAP, customized corporate group accounting standards) can be followed at the same time. SAP IFRS provides general guidance for the preparation of financial statements for all industries, rather than setting separate reporting rules for different industries.

As a legal requirement, the Communiqué on Financial Reporting Standard for Large and Medium-Sized Enterprises and its annex "Financial Reporting Standard for Large and Medium-Sized Enterprises" were published in the Repeated Official Gazette dated July 29, 2017 with the number 30138. The Financial Reporting Standard for Large and Medium-Sized Enterprises (BOBİ FRS) is a financial reporting framework to be applied by enterprises that are subject to independent audit and do not apply Turkish Financial Reporting Standards (TFRS). The objective of the SOBI FRS is to provide financial statements that are fair, consistent with the need for financial information and comparable. 4,700 companies will apply the SOBI FRS as of 1/1/2018.

General criteria according to the aforementioned Council of Ministers Decree No. 2016/8549;

a) Total assets of 40 million or more Turkish Liras.

b) Annual net sales revenue of 80 million or more Turkish Liras.

c) Number of employees is determined as 200 and above.

In 2018, those exceeding the criteria determined by the Council of Ministers No. 2016/8549 (by evaluating 2016 and 2017 Data) are subject to Independent Audit. However, with the publication of the BOBİ Financial Reporting Standard, all companies reporting within the scope of the MSUGT (General Communiqué on Accounting System Implementation) must make their Financial Reports on 01.01.2018 and later and the Audit of these financial reports according to BOBİ FRS. (http://www.resmigazete.gov.tr/eskiler/2017/07/20170729M1-1.htm)

In addition to legal requirements, the most important factor in the need for IFRS is that different countries have different recording rules and different financial reporting regulations. The different formats used make it difficult to operate the centralized rules required by the parent company and, of course, reporting in IFRS standards is necessary for more accurate results from a financial point of view. IFRSs, from an international point of view, bring the accounting procedures of all branches of a company into a standardized, comprehensible, worldwide set of recording rules and reporting formats.