We have recently completed a number of IFRS Excel Calculators relating to assessing the possible impact of IFRS 15 and 16 on the financials of a listed entity.
A couple of key outcomes of this:
- The theory is great, but it is only once you start doing the actual calculations that the real questions start appearing.
- Getting the correct level of input data is more challenging than you think. Leave enough time to get the data.
- In theory you can do some high level calculations, but you may have lots of problems once you want to unwind these high level calculations. Averages of averages also tends to hide issues. It would be better to immediately go to the lowest possible level.
- Excel is not the final solution. Eventually you MUST build this into your ERP. But Excel is great to get an initial overview of the impact and start to prototype your calculations. There are lots of little intricacies in the calculations especially related to dates and how the calculations handle them.
- Excel can handle lots of data. The one calculator assesses over 400 000 contracts.
- It is imperative that you use some of the recent Power Tools that Excel has introduced. In particular Excel’s PowerQuery and PowerPivot tools.
- Excel has the formulas that can help with the detailed calculations. You may struggle to replicate what Excel can do in an ERP system. The particularly useful tools relate to time value of money formula. In fact our Time Value of Money course covers most of the formulas and techniques you may want to use. At the very least get to know how XIRR, XNPV and CUMIPMT work.
For more information on how we can help you with your IFRS conversion calculations (applying the theory to reality to see the impact) visit our consulting page ( Excel Consulting ) or send an email to adrian@AuditExcel.co.za .