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This general ledger supports multiple GAAPs in parallel. For
For each GAAP it can be decided if the implementation should cover a
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Figure: Drilldown from general ledger account balance
A
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- All financial instruments and
- All non-financial instruments as well as
- All valuation elements
As such, a full-size general ledger reflects the entire business of an entity.
It provides specific general ledger functionalities such as
- valuation of account balances in FX and posting of the related FX result
- profit and loss zeroisation at the end of a configurable fiscal period
Beside comprehensive financial statements, the functionality includes the support of analysing, reporting and presentation requirements.
A shadow ledger concentrates on an excerpt of the business of an entity. This excerpt can be for example “All financial instruments” or a “Loan Ledger”.
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The decision which implementation type of a general ledger in FlexFinance fits best should include the following aspects:
- No third-party general ledger is in place
- A third-party general ledger is in place, but
- does not support the drilldown of general ledger account balances to individual deal level (often third-party general ledgers work at aggregated level only)
- does not support the breakdown of account balances to freely definable portfolios (often third-party general ledgers are limted to 3 to 5 criteria which can be used for drilldown)
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General Ledger consists of
- Balance Sheet
- Profit and Loss
- Chart of Accounts
It can deal with
- Multiple GAAPs in parallel (The General Ledger contains a separate chart of accounts for each GAAP)
- Multiple tennants (The General Ledger supports consolidated views)
- Multiple currencies (The General Ledger keeps all bookings in original transaction currency as well as in functional currency)
The General Ledger
- Allows analysis at account, product, customer, business and project level with results aggregated at account / cost center level.
- Allows more accurate and efficient product control as entries are made at detailed and consolidated levels.
- Enables easier automation of reconciliation with minimal manual intervention as detailed or transaction-based data can be tracked and analysed in multiple dimensions.
In a multi-GAAP environment, it is possible to run e.g. a full-size general ledger for IFRS and a shadow ledger light for local GAAP which focusses on the specific valuation elements for a specific portfolio.