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Study: ASC 606 Might Slow IPOs in 2018 ??

Posted on October 13th, 2017 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

A new study by Deloitte reveals that initial public offerings (IPOs) may suffer as a result of New Accounting Standard (ASC606)

Here are excerpts from an article by Terry Sheridan in accountingWEB.com

Here’s a snapshot of the survey’s findings:

  • 60 percent of the respondents said they have not begun implementation of the standard or have only done an initial assessment.
  • But 53 percent said IPO activity will increase modestly (46 percent) or substantially (7 percent) in the next year.
  • 83 percent of respondents said it takes 12 months (40 percent) to 18 months (43 percent) prior to the IPO to put in place the structural and operations changes needed for a public offering.
  • 49 percent of respondents said media, technology and telecommunications industries would attempt the most IPOs.

Read the full article in accountingWEB.com

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Vertex and Oracle Cloud

Posted on October 13th, 2017 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

Oracle ERP Cloud Transaction Tax Automation is consist of Comprehensive Tax Partner Offerings

  • Robust infrastructure for tax partner solutions
    • Tax Content and Tax Reporting services providing fast ROI option for mid-market companies adopting Oracle ERP Cloud
    • Integrated Cloud-to-Cloud tax calculation services for enterprise grade companies
  • Infrastructure has been optimized for ERP Cloud customers using end-to-end Vertex transaction tax offerings, lending value in fulfilling the compliance function

Let see some key features and automation Flow.

Tax Content Offering

The Vertex tax content service covers geographies, tax jurisdictions, and tax rates.

This service supports address validation for master location data, and provides tax jurisdictions and tax rates data for US locations all updated on a monthly basis to comply with
statute changes.

In addition, users may opt for taxability rules content, which adds product and service taxability taxability rates and customer-specific product and service tax rules also updated on a monthly basis.

Tax Calculation Offering

  • "Cloud-to-Cloud" integration of ERP Cloud and Vertex O Series Cloud for transaction tax calculation
  • No software integration components deployed on Cloud
  • Seamless data flow between Oracle ERP Cloud and Vertex O Series

Tax Reporting Offering

  • Vertex Indirect Tax Returns - Signature-ready returns for U.S. sales and use taxes are produced for filing
  • Vertex Returns Outsourcing Service - Vertex can manage the entire tax compliance function from tax returns generation to payment remittances

    Here is how end-to-endTransaction Tax Solution usually Flow

tax

Fig1 :Vertex End-to-End Tax Solution Automation

 

The Vertex solution architecture enables “cloud-to-cloud,” touchless integration of Oracle ERP Cloud and Vertex Cloud.

Enjoy efficient, user-friendly uptake and integration, with no need to host any software or integration components on premise.

There is no need to apply patches, service releases, or monthly data updates Vertex takes care of these for you.

Leverage the benefits of powerful tax automation as below:

  • Real-time transactions and batch processes for tax functionality
  • Tax-sensitized receivables and payables invoices
  • A streamlined process with accurate tax outcomes
  • Secure, cloud-hosted journal retention for tax return compliance

Posted in Oracle E-Business Tax | No Comments »

Introducing Oracle’s intelligent Bots

Posted on October 2nd, 2017 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

Do you know ,Chatbots are the latest and hottest topic and the newest way to engage your customers , employee or partner through messaging apps.

This is one of the most interesting sessions that I attended on the first day of Oracle OpenWorld 2017 and there this post will help to share more insights on Chat bot and thus Oracle’s intelligent Bots.

As per Wikipedia ,A chatbot (also chatterbot, chatterbox) is a computer program which attempts to maintain a conversation with a person
A Chatbot or Bot is a computer program designed to simulate a conversation with human users, especially over the Internet. End users can easily discover and connect to Chatbots through many of the popular messaging apps, without the need to individually download and install them from an App store.

This gives Bots a distinct advantage over device-resident Mobile Apps in many circumstances. With a Bot, your service can be instantly available through a messaging app the user already has installed on their mobile device.

An Intelligent Bot, powered by Artificial Intelligence (AI) dramatically improves the conversational experience, allowing a far more natural conversation between the Bot and the end user. However it is expressed and respond accordingly. Intelligent Bots will ensure your users keep engaging and coming back to your service.

Oracle Intelligent Bots: Key Components

With Oracle Intelligent Bots, an integrated feature of Oracle Mobile Cloud, Enterprise, you can develop Intelligent Bots that can create a more natural conversational user interface, through text or speech, to your enterprise systems.

  • Pre-Integrated Delivery Across Channels - This is for APIs for integration with Instant Apps and channels, dialog builder, human-handoff framework
  • Enterprise Ready - Pre-built back end integration framework, connectors, security, scale, continuous bot analytics
  • Embedded AI for Conversational Dialog - Unified contextual state engine and AI platform, Speech & image recognition, intent detection, multilingual NLP

By using Artificial Intelligence (AI) and Natural Language Processing (NLP) powered by Neural Networks and Machine Learning, Oracle Intelligent Bots can more easily detect what the user is trying to achieve (their intent) and respond appropriately with information or results of transactions from API connections to any of your back-end enterprise applications and information sources.

The platform makes it simple and easy to build and train Intelligent Bots without the need for specialist AI skills.

Your bots can then be exposed through many Chat and Voice channels, a custom mobile app or even your web site.

Oracle Intelligent Bots has the following 4 components

Oracle Intelligent Bots has everything that customers need to build a chatbot with channel integration, dialog flow, AI engine, integration and an easy to use Bot builder UI that brings this all together. Oracle Intelligent Bots provides you with a solution that is predictable in terms of cost, ease of use, level of effort and with a rapid time to market.

Looking at the architecture, the Oracle Intelligent Bot supports a clear separation between Interacting with the channels (Facebook, etc.), the actual Intelligence, dealing with providing an answers, and the Integration with backend systems.

Chatbot architecture layering

Fig 1: Chatbot architecture layering

But above all, it provides you with a solution that can enable you to deliver the next generation of customer engagement

  1. Channel configurator that abstracts the communication and UI/UX aspects of the end channel.
    • Here end users have a choice of messaging channels they prefer to use. Certain geographies have specific channels as their preferred messaging channel while other geographies
      prefer other messaging channels. There are different categories of channels as well.
      Broadly, these can be categorized as follows:

      • OTT Channels: Over the top (OTT) messaging channels such as Facebook Messenger, Facebook WhatsApp, WeChat, Line, Kik, Telegram, Talk, Skype, Slack,SMS.
      • VPA: Virtual Private Assistants such as Amazon (Dot, Echo, Show), Google Home,Apple HomePod.
      • Mobile & Web app extensions: Extending native or hybrid/responsive mobile apps or web applications with chat capabilities.
      • Voice Based Input : Custom devices or apps with interfaces that use Siri, Cortana, Google Voice or other speech input for interaction.
  2. Dialog flow execution – the heart of the Intelligent Bots is a state machine that executes context driven workflow with scoped variables. One of the differentiators with Oracle’s Intelligent Bots is that the AI components of NLP and Machine learning are part of this state flow engine as opposed to a separate black box which makes it very simple and easy for the Bot developer to model a conversation without having to worry about the state engine and the AI algorithms
  3. AI Engine – Here active machine learning that identifies the intent of the conversations from the end user and extract entities from unstructured data to create a structure ‘query’ to get data from the enterprise and respond back.
  4. Components. This is final building block of the Bot builder are the components. These are typically enterprise backend systems that own customer’s banking information, or employee information in a HCM system, or sales information in a Sales CRM system.
    • There are system components that handle things like message channel visualization and custom components that provide integration to mobile cloud service to reuse APIs that have been created for the mobile channel.

Oracle Intelligent Bots Key Components

Fig 1 :Oracle Intelligent Bots : Key Components

Therefore Oracle’s intelligent Bots sounds to be integrated & One multichannel Integrated solutions.

Next post , will be more on Oracle Chatbot Platform

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EBS : Milestone Billing

Posted on September 29th, 2017 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

Milestone is a type of billing that occurs only as certain milestones have been attained.

Milestones are events or conditions that trigger the billing.

For example, you can bill customers based on the number of days since the activity began, a specific date, a manual milestone you specify, or an activity percentage of completion.

You define the milestones to be used and the amounts to be billed for each milestone.

In EBS R12.2.7 , Oracle Order Management extends support for flexible ordering of products, services, subscriptions and warranties with a new milestone billing option.

This option lets customers with long lead times for custom-designed equipment define the amount or percentage to be billed at each interim milestone.

This help to Support for manual item substitution after order booking avoids the overhead of cancelling and recreating order lines.

Indeep a great feature , after a long time.

Posted in Oracle Order Management | No Comments »

Excellent reference for understanding technical terms related todays IT….

Posted on September 23rd, 2017 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

Here is the Ultimate Fin Tech Glossary got a fwd email (source internet).

Financial

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A Primer For Finance Professionals- Blockchain

Posted on September 6th, 2017 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

Blockchain technology has created waves around the World, bringing transparency and massively reducing costs in sectors like Banking, Finance, Logistics and Manufacturing, among others. And this is only the beginning...

What is blockchain? And what are the potential implications for finance?

Great primer

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GCC :VAT IN THE MIDDLE EAST

Posted on September 2nd, 2017 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

GCC Apart from India GST new in recent past , In another milestone towards the implementation of VAT across the Gulf Cooperation Council, the Unified Agreement for VAT was published in the official gazette of one of the member states, Saudi Arabia.

The Unified Agreement provides the framework for the operation of VAT across the GCC.

Each GCC member state will implement the framework through legislation and other instruments. This milestone is another reason for companies operating in the Middle East to put in place or further their VAT implementation plans.. Companies in these region already started for Implemnating GCC .

Let's have a quick look :

The Gulf Cooperation Council (GCC) was formed in 1981 to create unity and economic stability amongst the member nations.

The International Monetary Fund recommended the introduction of an indirect tax system to increase revenue for the member countries.

All member states signed the VAT Framework Agreement, which establishes the main principles for the application of the VAT regime in the member countries.

Here are Key Highlights for KEY Unified VAT Framework

GCC KEY HIGHLIGHTS

Currently , GCC Member Nations

  • Bahrain
  • Kuwait
  • Oman
  • Qatar
  • Saudi Arabia
  • United Arab Emirates (UAE)

Each member will issue VAT legislation.

Majority of Tax system provide Tax Engine and Integration:

  • Logic to natively support Goods and multiple Services type transactions in the Kingdom of Saudi Arabia and the United Arab Emirates
  • Domestic, Intra-GCC, and International (Import and Export) transactions are all supported

Why GCC is getting some much attention

Reason , a deadline is given for these countries

  • United Arab Emirates and Saudi Arabia in Q4 2017
  • Qatar, Oman, Bahrain, Kuwait in 2018 (dependent on legislation)

Though , It’s official: 2018 will see the start of implementation of a value-added tax (VAT) across the Gulf states

Business Functional Area where get impacted [TRANSITION-RELATED CHALLENGES]

Businesses will face the impact of VAT in two ways: by the additional investments needed for compliance,as well as the higher input cost of the new VAT, itself .

However, companies may refrain from passing on the entire input VAT to consumers owing to the fear of losing business.

Some key Challenges can be best understood as :

In Procurement : Major Trabsition Releated challenges might be

  • Formulate new procurement strategies
  • Vendor management
  • Revisit contracts and arrangements

Accounting & IT System

  • Update financial and point of sale systems
  • VAT coding for payables and receivables
  • Electronic documentation/process automation [ if any]

Sales & Pricing

  • Assess impact of VAT on demand/current contracts
  • Pricing strategy and terms of payment
  • Customer management

Knowing Where to Start

So, where do you start to determine which approach is best for you? Deploy a new ERP in the cloud? Keep your core ERP and connect cloud VAT services? Should go with Tax vendor ?

There are a number of factors to consider:

  • What is the age of your existing ERP system? Are you running the latest version of the software, or are you on an old vesrion?
  • In how many countries do you do business?
    • The more geographies, currencies,and languages you operate in, the more rules, regulations, and compliance issues you will need to consider.
    • It might be worth a full-scale migration to cloud in order to keep on top of all the permutations.
  • How many transactions does your ERP process in a day?
    • The higher the transaction volume, the more important it is that your core system be scalable enough to meet demand.
  • Are you looking at a full ERP replacement in the near future?
    • If so, it might make sense to take a phased, “outside-in” approach—starting with tax applications in the cloud to meet the immediate VAT deadline, and then moving core ERP to the cloud at a later date.

No matter which approach you decide on, VAT is coming. Every GCC business will need to comply. I recommend that you form a project team as soon as possible to understand how VAT will impact your business and operating model.

Assess the capability of your existing systems to comply with the new regulations.And then, choose an implementation partner and a software vendor with the real experience and capabilities to meet your needs.

More Reading

You can get more reading

Closing Thoughts

As per The UAE Ministry of Finance

The system for VAT registration and payment is being developed to meet the very best global standards using leading-edge technology. All services will be online and accessible 24/7, responding to the requirements of business. This reflects the UAE’s aim to be a leader in innovation and technology across all aspects.

Posted in Finance, Functional, Fusion Application, Oracle Cloud * | No Comments »

ASC 606 and IFRS 15 Revenue Recognition automation

Posted on September 1st, 2017 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

Do you know , there have been multiple acquisitions and announcements in the revenue recognition space as IT vendors ensure that they can support the ASC 606 standard including:

  • Intacct’s May 2016 announcement as the first automated ASC 606 solution
  • Zuora’s May 10th, 2017 acquisition of Leeyo
  • CallidusCloud’s May 24th, 2017 acquisition of RevSym
  • Aptitude Software (Microgen plc) , On August 31st, 2017 Acquires RevStream

One wonders how long revenue recognition vendors Softrax will remain available on the market!

Moreover , EBS customer can think for exexistance possibility with Oracle Revenue Management Cloud , which is a centralized, automated revenue management product that enables you to address the ASC 606 and IFRS 15 accounting standard for Revenue from Contracts with Customers.

ERP vendor like SAP and Netsuites also have seprate module to support ASC 606 and IFRS 15.

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ASC 606 & IFRS 15: Revenue from Contracts with Customers

Posted on July 9th, 2017 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

As we all know, on May 28, 2014, the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) together issued a converged standard about recognition of revenue from contracts with customers.

Known as ASC 606, Revenue from Contracts with Customers, the standard will improve the financial reporting of revenue and improve comparability of the top line in financial statements globally, the Boards say.

Under the new revenue reporting regulations, which would establish a comCapturemon revenue standard for U.S. Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS), an entity will have to implement the following five steps for contract creation process .

  1. Identify the contract(s) with a customer.
  2. Identify the performance obligations in the contract.
  3. Determine the transaction price.
  4. Allocate the transaction price to the performance obligations in the contract.
  5. Recognize revenue when (or as) the entity satisfies a performance obligation.

There is a misconception by some that ASC 606 only applies to SaaS companies. While recurring revenue companies are certainly impacted, any company with contractual obligations to their customers are impacted.

The new rules will affect companies that use even moderately complex contracts in their dealings with customers. They include, for example, contracts that are structured using tiered pricing or volume discounts or ones that routinely involve modifications, such as adding or dropping users, or that allow seasonal changes to services

More reading : ASC 606 Revenue Recognition

FASB’s new single, principle-based approach to accounting for revenue from contracts with customers is a turnaround from the existing rule-based system, and auditors and consultants are providing a lot of guidance regarding the new standard in regards to how it changes revenue accounting and related disclosures:

Posted in Oracle Application | No Comments »

ASC 606/IFRS 15 & Oracle’s Revenue Management Cloud Service (RMCS)

Posted on June 11th, 2017 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

As we know , the entire accounting approach to revenue recognition is undergoing a wholesale re-write. Rather than relying on using a deferred revenue account, you will need to identify and account for performance obligations.

WHAT CHANGES ARE BEING INTRODUCED?

Revenue recognition is taking a more scenario and rules based approach to what can be recognised and more importantly when.

as we know ASC606 , there is introduction of the following 5 Steps to Recognising Revenue:

  1. Identify the contracts with the customer
  2. Identify the separate performance obligations
  3. Determine the contract price
  4. Allocate the transaction price
  5. Recognise revenue when a performance obligation is satisf ed

Whatever ERP you run, whether it is Oracle or not, you need to consider the impact of this accounting regulation on your business.

IS THERE A SOLUTION/OPTIONS OUT THERE?

Oracle’s Revenue Management Cloud Service is the way forward.

This is a centralized, automated revenue management solution that enables you to address the ASC 606 and IFRS 15 accounting standard Revenue from Contracts with Customers.

Oracle’s Revenue Management Cloud service can be integrated with your existing ERP, whether it’s Oracle or not, to address the requirements of IFRS 15.

  • Comply - Adhere to the IFRS 15 core principles
  • Audit -Provide complete and accurate access to revenue
  • Automate -Automate revenue calculations based on the new accounting standard
  • Integrate -Integrate with your existing ERP and third party system

An application that enables you to manage customer contracts and performance obligations easily to help you address the mandates of the new accounting guidance.

Is part of Oracle Enterprise Resource Planning Cloud and has the capability to co-exist with any source application, say Oracle EBS.

Robust integration is available with third party applications, say Oracle EBS.

DISCLOSURE CONSIDERATIONS:

Once of the critical area in new Accounting standard is Disclosure Management .

You will need to either recalculate your fnancial statements for the last two years, or disclose in the year of go-live the impact of the new standard.
Oracle’s Revenue Management Cloud Service can help here too to Integrate with your BI or Hyprion .

Revenue Management Cloud Services Coexistence with Oracle E-Business Suite

Oracle Revenue Management Cloud is an automated and a centralized, revenue management product that addresses ASC 606 and IFRS 15.

Oracle Revenue Management Cloud Service lets you to apply the five steps of core principle of ASC 606 and IFRS 15 requirements:

clasical steps ASC 606

The product provides a framework to automate the creation of customer contracts and performance obligations as per IFRS 15, their valuations and resulting accounting entries, and enables to recognize the revenue over time or at a point in time with these key Features.

  • Contracts and Performance Obligations
    • Rules based Automation
    • Flexible Configurations
  • Revenue Allocations
    • Simplified Revenue Accounting
    • Compliant Allocations as per Standards
  • Satisfaction Schedules
    • Point in time and over time
    • Independent Billing
  • Recognition
    • Liabilities Accrual and Assets recognition
    • Income Statement on transfer to customer on performance obligation met

Most of companies must comply with the new ASC 606 and IFRS 15 accounting standard for fiscal years that begin on or after January 1, 2018.

In its last and greatest release of Oracle Revenue Management Cloud R12 includes a coexistence solution with Oracle EBS.

Oracle E-Business Suite (EBS) products use the coexistence solution for integration with Revenue Management to bring in source document revenue lines from upstream sales cycle systems. Beacuse of these co-existance model , Reference data, such as customers and inventory items, are synchronized between EBS and Revenue Management seemlessly .

ORCA

 

The coexistence feature enables you to deploy a uniform, centralized and comprehensive view of contracts with customers, unifying the details tracked in a variety of order management, retail point of sales, and billing systems.

The Revenue Management Cloud Service (ORMCS) is a Software-as-a-Service (Saas)-based too, sold on a per user per month basis

As per Documentation , following 6 steps will ensure automated, efficient compliance with ASC 606 and IFRS 15 without impacting your existing sales processes in EBS:

  1. Extract Data from EBS : Extract data related to the sales cycle.
    • For example, orders, contracts, receivable data, point of sale data, projects, shipping, traffic, and other fulfillment data.
  2. Import Revenue Basis Data and Billing Data: Import revenue and billing data into Revenue Management using predefined File-Based Data Import (FBDI) templates for Revenue Basis and Billing data.
  3. Validate and Correct Customer Contract Source Data: Integrated programs in RMCS validates the imported lines, transforms master data, and assigns the transaction period to the imported lines.
  4. Ensure compliance with the new accounting standards ASC 606 and IFRS 15: Revenue Management analyzes the data in centralized repository that stores imported and processed sales cycle data, and provides user-configurable contract identification and performance identification rule engines for the system to automatically run the 5 steps of the core principle of ASC 606 and IFRS 15 requirements illustrated above.
  5. Compare sales cycle data: Perform what-if iterative studies of how you might implement the new rules, such as the impact of different definitions of contracts and performance obligations, different pricing paradigms, different satisfaction criteria, and so forth.
    • Oracle recommends that you compare the results of your current accounting (ASC 605 and IAS 18) to each accounting iteration generated in Revenue Management (based on ASC 606 and IFRS 15) in an enterprise performance tool,
  6. Create Accounting in EBS GL: The Subledger Accounting rules engine in RMCS provides out-of-the-box seeded accounting events to address the need for creating contract assets and contract liabilities at initial performance, as well as reflecting the appropriate accounting once a performance obligation is billed.

This is how best we can undersood Revenue Process with Oracle Revenue Management Cloud.

Revenue Process

Untill , next post , bye.

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