Financial Instruments Transformation and Elimination in Accordance with International Financial Reporting Standards

Abstract

This paper presents a unified methodology of transformation and elimination of financial instruments in accordance with International Financial Reporting Standards (IFRS) in SAP R3 environment. SAP R3 is a module that allows creating a single chart of consolidation accounts, defining a hierarchy of consolidated companies, collecting data on-line and loading it from external systems, recalculating rates, automating reconciliation and exception in-group turnovers, debt consolidation, equity and generating consolidated reports. The proposed method can be used by subsidiaries of energy companies in form of public companies who are involved in the preparation of transformed statements in accordance with International Financial Reporting Standards (IFRS). In addition to the lack of a unified methodology of transformation and elimination of financial instruments, problems caused by report in introduction of IFRS 9 "Financial Instruments" to 2015 are discussed. The article also provides a rationale for the transformation amendments of elimination of the financial result caused by disposal of investments and amendments to repel investment using the equity method in the consolidated (consolidated) financial statements. Transformation amendments have been shown necessary in two systems: International Financial Reporting Standards (IFRS) and Russian Accounting Standards (IFRS).

DOI: 10.5901/mjss.2015.v6n2p286