November 24, 2008. An automated IFRS statements consolidation system based on SAP solutions has been built at MIR, one of Russia’s biggest retail chains. The project was carried out by the staff of MIR Group and IBS, the leader in the Russian IT and consulting market.
Until recently, due to fast business growth, consolidation of statements at MIR was quite labour-intensive and time-consuming. In order to improve the quality of information and speed up its preparation, it was decided to automate processes of transformation of Russian accounting standards (RAS) accounting data for generation of consolidated International Financial Reporting Standards (IFRS) statements. In addition, the system to be built had to be integrated into MIR’s unified SAP ERP corporate management system.
SAP EC-CS (Enterprise Controlling – Consolidation System) was selected to be the platform for building the IFRS statements consolidation system. IBS was appointed to act as the contractor because of its wealth of experience of carrying out similar projects based on SAP solutions.
Before the project started, MIR staff formalised the charter of consolidation accounts, the set of analytical properties, all formalizable transformation and consolidation adjustments, and produced specifications for statements. This work formed the groundwork for the solutions used by IBS consultants in the project. The project per se included automation of the processes of import and validation of statements data from the SAP ERP finance module, comparison and exclusion of intra-group sales and balances, exclusion of unrealised income in inventory, consolidation of investments and capital, generation of both dynamic (drill-down reporting) and fixed consolidated statements, and other processes. The project was completed within less than 5 months. The system has 10 users.
The project ensured efficient use of resources in consistency checks of source data, reconciliation of internal sales and balances, and calculation of unrealised income across different areas of consolidation. It is also important that the system delivered enables itemization of consolidated data by any component items from the legal entity down to individual entries, and generation of consolidated RAS statements.
Nikolay Kudryavtsev, Financial Director, MIR: “In this joint project with IBS we were able to achieve maximum reduction in time required to generate consolidated IFRS statements, reduced the amount of effort involved in those processes and got a reliable tool for checking the validity of consolidated financial data and comparison of intra-company sales and balances.”
Alexander Saksin, Deputy Director, Corporate Management Systems Department, IBS: “Regular consolidated IFRS statements are the main source of information about the company for auditors, shareholders and investors. The need to ensure validity of financial statements, control subsidiary operations, achieve efficiency in using corporate resources by automating routine procedures will maintain the demand for statements consolidation systems in any economic situation.”
Companies’ Profiles
MIR is one of the biggest nation-wide retail chains with over 70 hypermarkets of household appliances and electronic equipment throughout Russia (in 40 cities including Moscow, St. Petersburg, Volgograd, Yekaterinburg, Kazan, Krasnoyarsk, Sochi, etc.). MIR stores have the total space of over 150,000 sq.m., and the retail chain had sales of USD 675 million in 2007. MIR is among the top 400 Russian companies (according to Expert rating agency, in 2005, 2006, 2007) and the top 200 Russian private companies (according to Forbes, in 2005, 2006, 2007), received the Brand of the Year/ Effie-2004 golden award and four Golden Nets awards (in 2004, 2005, 2006, 2008). For more information about MIR, please visit www.mirinfo.ru or contact the company’s press service on telephone +7 (495) 933-2663 # 1375, mobile +7 (916) 590 1091, or by e-mail at pressa@mirinfo.ru.
SAP is the world’s leading vendor of business management software (*); it offers solutions and services enabling enterprises of any scale from more than 25 industries to improve their business efficiency. The company has over 76,000 customers (including Business Objects customers) in more than 120 countries and is traded on several exchanges, including the Frankfurt Stock Exchange and the New York Stock Exchange, under the ticker symbol "SAP”.
In 1992 SAP AG opened its office in Moscow. In addition, over the past 15 years SAP opened its representative offices in St. Petersburg, Novosibirsk, Almaty, Minsk and Kiev, and the headcount exceeded 700.
For more information on the company, please visit http://www.sap.com/, http://www.sap.ru/.
For further information, please contact SAP offices in the CIS countries.
(*) SAP defines business management software as enterprise resource planning solutions and respective applications.
IBS is the leader in the Russian IT and consulting market. Along with Luxoft and Depo Computers, it is part of IBS Group Holding Limited. Its core lines of business span management consulting, implementation of business applications, IT outsourcing and IT infrastructure. IBS headcount is about 3,000 employees including over 1,500 certified consultants and professionals. IBS customer base includes 34 of Russia’s top 50 companies. For more information on IBS, please visit http://www.ibs.ru/.
For further information on IBS, please contact Lada Scherbakova, PR Director at 007 (495) 967-80-80, or by e-mail at lada@IBS.ru.
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