A French group may prepare local statutory accounts under French GAAP while publishing consolidated financial statements under IFRS. This coexistence creates differences in accounting treatment, presentation and timing that must be managed in the consolidation system.
Why a simple conversion table is not enough
Moving from French GAAP to IFRS is not based solely on account mapping. It involves adjustments, different measurements and sometimes data absent from local accounting records.
Some structural differences
Business combinations and goodwill
Rules for identifying and measuring acquired assets, goodwill and non-controlling interests may differ. Under IFRS, goodwill is not amortized but tested for impairment, while French rules may lead to different treatments depending on the applicable framework.
Leases
IFRS 16 generally requires a lessee to recognize a right-of-use asset and lease liability. French statutory accounts often follow a different distinction, creating recurring adjustments.
Employee benefits
IAS 19 governs actuarial measurement and presentation of obligations. Required data often goes beyond information available in the local general ledger.
Financial instruments
IFRS 9 requires specific classification, measurement and impairment models, including expected credit losses. French accounts may follow an approach closer to historical cost and incurred risk.
Property, plant and equipment and impairment
Components, useful lives, residual values and impairment testing must be analyzed. IAS 36 notably introduces an approach based on cash-generating units.
Presentation and disclosures
IFRS requires more extensive information and justification. IFRS 18 will further reinforce the income statement structure, disaggregation and the framework for performance measures.
Organizing multi-GAAP reporting in EPM
- retain unchanged local data;
- identify each adjustment by framework;
- manage separate adjustment journals;
- document rules and rationale;
- support several reporting hierarchies;
- reconcile equity and profit between frameworks.
The essential role of the audit trail
Every difference must be explainable from the local account to the published IFRS amount. An adjustment journal must specify its owner, application period, recurring nature and any reversal.
Avoid last-minute adjustments
Recurring differences must be industrialized within the closing calendar. Data required for leases, employee benefits, financial instruments and impairment tests must be collected in advance.
A well-designed multi-GAAP model can produce different views without duplicating data and integrate new entities more quickly. It turns GAAP conversion into a governed process rather than an annual Excel exercise.