For example, a company may maintain its accounting records in local GAAP, but consolidates and reports in accordance with U.S. GAAP. The company needs to perform a reconciliation between the two in order to understand and validate the adjustments.
BlackLine has multiple options to mitigate the challenges companies encounter with statutory reconciliations. Companies like Emulex, Merrill Corporation and United Technologies rely on BlackLine’s Financial Close Suite to prepare these types of reconciliations. The Consolidation Integrity Manager (CIM) module allows users to more easily prepare reconciliations between different financial reporting standards. One standard serves as the base, or underlying reconciliation, and is prepared as a regular account reconciliation, using the Account Reconciliations module (such as local GAAP). Then the other standard’s balance is imported into the CIM module (such as U.S. GAAP). If the balance in the base (i.e., underlying) reconciliation is equal to (or within a tolerable threshold) the second reconciliation, that account can be auto-certified.
Alternatively, users can employ the Account Reconciliations module to upload multiple balances (e.g., GAAP, statutory and IFRS) and apply an account segment to identify the balance type. With potentially three resulting reconciliations, they can then complete an additional reconciliation to compare two of the balances (such as the local GAAP balance to the U.S. GAAP balance).