Why did SAP change its accounting from U.S. GAAP to IFRS?
SAP did not change its accounting from U.S. GAAP to IFRS but discontinued its U.S. GAAP reporting in 2009 after several four years of parallel IFRS and U.S GAAP reporting.
Why is SAP reporting under IFRS?
In July 2002, the European Parliament and the Council adopted Regulation No. 1606/2002 on the Application of International Accounting Standards (IAS). This regulation requires companies publicly traded and domiciled in the European Union to prepare their consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) for fiscal years starting on or after January 1, 2005. Companies with a dual listing in the EU and at the New York Stock Exchange were required to prepare consolidated financial statements under IFRS for fiscal years starting on or after January 1, 2007. Accordingly, SAP AG was required to prepare its consolidated financial statements for fiscal year 2007 in accordance with IFRS.
Is SAP's U.S. GAAP accounting being continued?
Our U.S. GAAP accounting was discontinued in 2010. The consolidated financial statements published in our Q4 2009 earnings release for the fiscal year 2009 were our final U.S. GAAP financial statements.
What are the fundamental differences between U.S. GAAP and IFRS accounting?
As with U.S. GAAP, the purpose of IFRS accounting is to provide decision-relevant information for investors. Whereas U.S. GAAP follows a largely casuistic approach, IFRS is more principle-oriented. The latter can, in principle, result in greater scope for interpretation but on the other hand provides more consistency in the accounting.
It is not possible to discuss all differences between U.S. GAAP and IFRS. Most of them are either not relevant or not material to SAP (as evidenced by the very small differences between our IFRS numbers and our U.S. GAAP numbers). This is mainly due to our IFRS accounting policies which we selected to be very close to U.S. GAAP. Moreover, the FASB (Financial Accounting Standards Board) and IASB (International Accounting Standards Board) are anxious to achieve further convergence between the two sets of rules in areas where there are still differences. In the light of these conversion efforts, the size of the differences between U.S. GAAP and IFRS at SAP for fiscal years 2007, 2008 and 2009 are immaterial.
Is reporting and presentation significantly different under IFRS as compared to U.S. GAAP?
SAP has chosen its IFRS accounting policies in a manner that there are no significant differences between U.S. GAAP and IFRS. Especially there are no differences in revenue recognition and the only difference in our presentation of revenues results from applying the different definition of discontinued operations under U.S. GAAP versus IFRS. Other differences in presentation resulted from slightly different requirements regarding, for example classification and netting of items etc. Please refer to the Virtual Classroom Session for further details.
Is there any training for the capital market on the conversion from U.S. GAAP to IFRS?
A Virtual Classroom Session which presents key aspects of the IFRS conversion is available for download. The major aspects of IFRS accounting are being described and the reconciliation of the half year 2009 consolidated statements from US GAAP to IFRS are explained.
Did the switch from U.S. GAAP to IFRS accounting have effects on the company's key performance indicators?
Certain Non-GAAP measures derived from U.S. GAAP measures (e.g. Non-GAAP operating margin) were our key performance indicators. Starting in 2010, these Non-GAAP measures have been replaced by Non-IFRS measures that are derived from our IFRS numbers.
We have defined our Non-IFRS measures in a manner that the differences – which are already minor when comparing our U.S. GAAP and our IFRS numbers – were even smaller on a Non-IFRS / Non-GAAP basis. An overview of our Non-IFRS measures and how they reconcile to our Non-GAAP measures is provided in our Virtual Classroom Session together with reconciliations from IFRS to US GAAP. Additionally, our 2008 and 2007 full year reconciliations also provide insight into the differences between IFRS / Non-IFRS and U.S. GAAP / Non-GAAP. In both years, the differences were not significant and we currently do not expect these differences to be significant in the future.
SAP's operating performance has not been affected by the IFRS conversion.
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