2. <Insert Picture Here>
Preparing for the Transition to International Financial Reporting
Standards (IFRS) with Oracle Governance, Risk, and Compliance
Sean Cronin – GRC Sales and Strategy Director
Stephanie Holmeen - Product Marketing Director, GRC Applications

3. IFRS: Why Should You Care?
•
•
•
•
IFRS is coming for customers in Canada and US
Major change in accounting and reporting
The transition process needs to start now
Can be a compelling event for Oracle Sales:
– Upsell to Hyperion Financial Management
– Upgrade to E-Business Suite Release 12, PeopleSoft 9, JD Edwards
EnterpriseOne 9, and JD Edwards World A9.1
– Cross-sell GRC

4. Agenda
•
•
•
•
IFRS Overview
Oracle and IFRS
Focus on IFRS with Oracle GRC
Summary
<Insert Picture Here>

5. Global Momentum Towards IFRS
Countries that require or permit IFRSs
Countries seeking convergence with the IASB or pursuing adoption of IFRSs
Source: IASB, Dec 2007

6. Expected Benefits from IFRS Convergence
A single standard for global business
More efficient access
to capital
Reduced cost of
financial reporting
Improved
transparency for
investors
It’s Not About Accounting; It’s About Capital Markets

7. Impact on US Companies
Proposed implementation timeline from the SEC
2009: Limited group
of large US firms are
permitted to use IFRS
on an optional basis
for fiscal periods
ending on or after Dec
15, 2009
2009
2010
2014:
Large
accelerated
filers begin
filing in
IFRS
2011
2012
2011: SEC evaluates
achievement of
roadmap milestones
and decides whether to
adopt a mandatory
approach for IFRS
Source: SEC Announcement, Aug 2008
2013
2014
2016: Nonaccelerated
filers begin
filing in IFRS
2015
2015:
Accelerated
filers to begin
filing in IFRS
2016

8. Impact on US Companies
The value of starting early
Growing awareness of complex
requirements…
…drives preference for early planning
and assessment
Within what timeframe would your company
adopt IFRS if given a choice?
Cumulative Reporting
Requirements
Companies are required to retrospectively
apply IFRS to all periods presented as if
they had always been in effect.
Multi-GAAP During Transition
During the transition period from US GAAP
to IFRS, firms must continue to report in
US GAAP and any local statutories, as well
as begin tracking IFRS equivalents.
Don’t Know
9%
More than 7
years
2%
Within 7
years
8%
Within 3
years
55%
Within 5
years
26%
Source: Deloitte, 2007
Potential Impact on Bottom Line
A study comparing of the impact of IFRS
adoption in the UK reveals that net income
generally rose by 39% while equity
declined by 23%. UK GAAP is considered
close to US GAAP in most areas.
“
No one anticipated how big it was going
to be. Every company was too late and
too slow in preparing – even the good
ones.”
Ken Wild, Global IFRS Leader, Deloitte
Sources: European Financial Reporting Research Group; Deloitte Touche Tomatsu

9. Impact on US Companies
Start early for transition period with multi-GAAP
2009: Limited group
of large US firms are
permitted to use IFRS
on an optional basis
for fiscal periods
ending on or after Dec
15, 2009
2009
2010
Transition Date?
While IFRS requires 2 years of
2014:
Large
comparatives, best practice
accelerated
recommends 5
filers begin
2016: Nonaccelerated
filers begin
filing in IFRS
filing in
IFRS
2011
2012
2011: SEC evaluates
achievement of
roadmap milestones
and decides whether to
adopt a mandatory
approach for IFRS
Source: SEC Announcement, Aug 2008
2013
2014
2015
2015:
Accelerated
filers to begin
filing in IFRS
2016

10. US GAAP vs IFRS: What’s Different?
You can make a living cataloging the differences
US GAAP: 25,000 Pages
IFRS: 2,500 Pages

11. Much is the Same…
Approach
(Some Examples)
Revenue Recognition
Fair Market (e.g. AR or Inventory
Valuation)
Detailed Disclosure
Segment Reporting
Chart of Accounts Not Mandated
Distinction Between Tax and
External Reporting
IFRS
US GAAP

12. …But There are Differences
US GAAP is always more specific, plus:
Approach
(Some Examples)
IFRS
US GAAP
Fixed Assets &
Investments
Only Certain Fixed
Assets
None
Rare
(Negative Goodwill)
Consolidation
Control
2 Models
Joint Ventures
Proportional OK
Only Equity
Capitalized
Expensed
No LIFO
LIFO OK
1 Step, Reversible
2 Step, No Reversal
Fair Market Revaluation
Extraordinary Items
Research & Development
Inventory
Impairment

13. Industry-specific Considerations
Areas of Potential Concern
IFRS Change Area:
PPE
R&D
FV
INV
IMPAIR
Financial Services
High Tech
Retail
Communications
Utilities
CPG
Life Sciences
PPE = Property, Plant, & Equipment
INV = Inventory
R&D = Research & Development
IMPAIR = Impairment
FV =Fair Market Revaluation
M&A = Mergers & Acquisitions
M&A

14. Agenda
•
•
•
•
IFRS Overview
Oracle and IFRS
Focus on IFRS with Oracle GRC
Summary
<Insert Picture Here>

15. Your IFRS Action Plan
Achieve “early mover” advantage
Stage 1
Study Impact &
Determine Strategy
Enable Top End
Reports
Stage 3
Stage 4
Record
Transactions
in both GAAPS
Transform Your
Business &
Win with IFRS
Stage 2
Perform
preliminary study
Collect GAAP
financial results
Determine impact
on accounting in
subsystems
Determine
changes to
business model
Assess impact
Adjust and
consolidate under
GAAP & IFRS
Configure
accounting rules
and set up ledgers
Transform
operations using
IFRS results
Determine
strategy
Report, reconcile
and audit results
Process and report
using dual
accounting
Report IFRS
results, increase
shareholder value
All Stages: Apply Policy and Control Management
Milestone 1
Completed Preliminary
Study
Milestone 2
IFRS Reports Produced
Milestone 3
Transactions Recorded
in Multiple GAAPs
Milestone 4
Business Model
Optimized
15

16. Oracle Enables Key Stages in IFRS Action Plan
Stage 1
Stage 2
Study Impact &
Determine Strategy
Enable Top
End Reports
Stage 3
Stage 4
Record
MultiMulti-GAAP
Transactions
Transform Your
Business &
Win with IFRS
Oracle Enterprise Performance Management
Oracle ERP
Financials
Other ERP
Financials
Custom or
Legacy
Oracle
Industry
Specific
Applications
Oracle Governance, Risk, & Compliance Suite
All Stages: Apply Policy and Control Management
16

17. Oracle Enterprise Performance Management
Enable Top End IFRS Reporting
CORE CONSOLIDATION FEATURES
Multiple reporting standards in a
single solution
GAAP
IFRS
CUSTOM DIMENSIONS
Enables tracking of
GAAP vs. IFRS
adjustments
Flexible Rules Engine
Journal Entries and Audit
DOCUMENT ATTACHMENTS
Creates “Electronic
Binder” of all
adjustments
FLEXIBLE REPORTING
Easy to
reconcile and
trend GAAP vs.
IFRS results
17

18. Oracle ERP Financials Designed for IFRS
E-Business Suite, PeopleSoft, JD Edwards
IAS/IFRS SUPPORT SINCE 2000
Thousands of customers overseas
reporting under IFRS
IAS 2
IAS 16
IAS 18
IAS 21
More
…
Inventory
Property, Plant
Revenue Rec.
Currency
Segments, etc.
…
Inventory, Costing
FA, ALM
OM, AR, BI, CA
Multibook, MRC,GL
Flex / ChartFields
…
DUAL GAAP ACCOUNTING
Ledger Set/Code:
SPECIFIC IFRS FEATURES
Specific functionality developed for IFRS
• Asset Componentization
Parent & Child Assets
Child Depreciation rates differ
• Impairment Processing
Impairment identification
Unplanned depreciation
IFRS MIGRATION PATH
Multiple Ledgers or Multi-GAAP
GAAP
US Principles
Expanded COA
Calendar
USD
Differences
Expanded COA
Calendar
USD
18

19. Oracle Governance, Risk, and Compliance Suite
Manage changes to policies and controls
GRC DOCUMENTATION REPOSITORY
COMPLIANCE WORKFLOW
Record changes to business
process due to IFRS
Automate
steps to audit
IFRS
compliance
APPLICATION CONTROLS MONITORING
Single subledger transaction creates multiple
accounting representations
Control
changes to
ERP
applications
COMPLIANCE DASHBOARDS
Monitor status of testing and
exceptions
19

20. Agenda
•
•
•
•
IFRS Overview
Oracle and IFRS
Focus on IFRS with Oracle GRC
Summary
<Insert Picture Here>
20

21. Oracle Governance, Risk, and Compliance Suite
Manage changes to policies and controls
GRC DOCUMENTATION REPOSITORY
COMPLIANCE WORKFLOW
Record changes to business
process due to IFRS
Automate
steps to audit
IFRS
compliance
APPLICATION CONTROLS MONITORING
Single subledger transaction creates multiple
accounting representations
Control
changes to
ERP
applications
COMPLIANCE DASHBOARDS
Monitor status of testing and
exceptions
21

22. Manage IFRS Policies, Controls and Risks
Align processes to IFRS
Standard specific to IFRS
Documentation of policies and
processes
Central repository for
policy, risk & compliance
documentation
Alignment of processes
and associated controls to
IFRS standard
Standards & Mandates
Easily compare US GAAP
and IFRS policies and
processes during transition
Standard specific to IFRS
Risk and Compliance Process
Document Risk
and Control
Matrix
Assess Scope
Based on Risk
Test Controls
and Analyze
Exceptions
Remediate and
Optimize
Certify and
Publish
22

23. Risk and Control Matrix
Identify risks and record changes to controls
Risks
Single system of record
for risk and controls
Document control
changes to comply with
IFRS
Controls
Standards & Mandates
Adjust audit scope to
new controls and risks
Standard specific to IFRS
Risk and Compliance Process
Document Risk
and Control
Matrix
Assess Scope
Based on Risk
Test Controls
and Analyze
Exceptions
Remediate and
Optimize
Certify and
Publish
23

24. Oracle Governance, Risk, and Compliance Suite
Manage changes to policies and controls
GRC DOCUMENTATION REPOSITORY
COMPLIANCE WORKFLOW
Record changes to business
process due to IFRS
Automate
steps to audit
IFRS
compliance
APPLICATION CONTROLS MONITORING
Single subledger transaction creates multiple
accounting representations
Control
changes to
ERP
applications
COMPLIANCE DASHBOARDS
Monitor status of testing and
exceptions
24

25. Automate and Streamline Audit
Audits become crucial with the IFRS principles-based approach
Sign-off and Publish
Certify
Remediate
Retest
Optimize
Receive Alerts
Review Reports
Investigate
Exceptions
Respond
Analyze
Assess
Perform
Self
Assessment
Scope
Audits
Test
Manual
Controls
Monitor
Automated
Controls
By allowing a higher degree
of interpretation, IFRS makes
audits even more important
Documentation, assessments,
tests, issue tracking and
remediation are evidence of
reasonable judgment
Easier sign offs over the
integrity of financial reporting
- Risk-Control Matrix of IFRS vs. GAAP
Document
Differences
- Policies and Procedures
- Evidence & Records Retention
25

26. Oracle Governance, Risk, and Compliance Suite
Manage changes to policies and controls
GRC DOCUMENTATION REPOSITORY
COMPLIANCE WORKFLOW
Record changes to business
process due to IFRS
Automate
steps to audit
IFRS
compliance
APPLICATION CONTROLS MONITORING
Single subledger transaction creates multiple
accounting representations
Control
changes to
ERP
applications
COMPLIANCE DASHBOARDS
Monitor status of testing and
exceptions
26

27. Support of IFRS Calls for Stronger Application Controls
Enforce proper access in applications
• Policy Library
• Conflict Paths
Simplify segregation of duties
enforcement with simulation and
remediation
Mitigate risk of privileged user
access to enterprise applications
with approval workflow and audit
trails
Accelerate deployment and time
to value with pre-delivered
controls library
Prevention
Detection
Define
Access
Controls
Access
Analysis
Remediation
(Clean-up)
Preventive
Provisioning
Compensating
Policies
27

28. Support of IFRS Calls for Stronger Application Controls
Ensure integrity of critical application setups
Achieve consistent application
setup and operating standards
across multiple instances
Track complete audit trails for
changes to key configurations
Tightly control change
management to accelerate
development and test time
Prevention
Detection
Define
Configuration
Controls
Document or
Compare
Configurations
Monitor
Configuration
Changes
Enforce
Change
Control
Manage
Data
Integrity
28

29. Support of IFRS Calls for Stronger Application Controls
Identify inaccurate or fraudulent transactions
Continuously monitor accuracy
of transactions and mitigate
exposure to fraud
• Test against thresholds
• Search for anomalies
• Perform transaction
Pre-delivered
Transaction Controls
Suspect
Transactions
sampling
Prevention
Detection
Define
Transaction
Controls
Perform
Transaction
Analysis
Review and
Address
Suspects
Preventive
Transaction
Controls
29

30. Oracle Governance, Risk, and Compliance Suite
Manage changes to policies and controls
GRC DOCUMENTATION REPOSITORY
COMPLIANCE WORKFLOW
Record changes to business
process due to IFRS
Automate
steps to audit
IFRS
compliance
APPLICATION CONTROLS MONITORING
Single subledger transaction creates multiple
accounting representations
Control
changes to
ERP
applications
COMPLIANCE DASHBOARDS
Monitor status of testing and
exceptions
30

31. Enterprise Visibility into IFRS Compliance
Timely access to information, better decisions
100+ pre-built KPIs for Risk,
Certification, Controls, and
Issues enable personalized
reporting
Self-service analysis and
reporting with interactive
dashboards and automated
alerts
Integrated IFRS compliance
information
GRC Reporting & Analysis
Review GRC
Dashboards
Configure Risk
and Control
KPIs
Investigate
Troubling
KPIs
Monitor All
Open Issues
31

32. Oracle Solutions for GRC
GRC Reporting & Analytics
Access Policy
KPIs
Risk & Control
KPIs
Certification
KPIs
Purpose-built business
solutions for key
industries and GRC
initiatives
GRC Process Management
Documentation
& Reporting
Management
Assessments
Issues &
Remediation
GRC Application Controls
SOD &
Access
Application
Configuration
Transaction
Monitoring
GRC Infrastructure Controls
Identity
Mgmt
Data
Security
Systems
Mgmt
Best-in-class GRC core
solutions to support IFRS
and other mandates
Records &
Content Mgmt
Digital
Rights
Pre-integrated with
Oracle applications and
technology, supports
heterogeneous
environments
Custom or Legacy Applications
32

33. Agenda
•
•
•
•
IFRS Overview
Oracle and IFRS
Focus on IFRS with Oracle GRC
Summary
<Insert Picture Here>

34. Key Takeaways
Start Early
• Use the benefit of a realistic implementation timeline –
don’t wait for the pressure of mandatory deadlines
• IFRS resources are scarce – start planning and education
sooner rather than later
• Report using IFRS principles with Oracle EPM
Leverage
Technology
• Push changes into general accounting with Oracle ERP
Financials
• Document and test IFRS controls with Oracle GRC
Optimize
Your
Business
• Consider how to optimize your business and gain
competitive advantage through IFRS
• Align your business model with the new capital market
model
34

35. To Learn More
In Person Events
IFRS Briefings with PwC and Oracle: http://www.meetpwc.com/IFRSNorCal
Webcasts
Upcoming PwC-Oracle IFRS webcasts (Dec 2008 - March 2009) :
www.meetpwc.com/OracleIFRS
Whitepapers
Preparing US Companies for the Transition to IFRS
Managing the Transition to IFRS
35