What is meant by Parallel accounting?
Parallel accounting refers to the practice of simultaneously preparing and maintaining financial transactions and reports according to multiple accounting standards. Companies may apply different accounting standards in parallel for various reasons, such as meeting the requirements of different countries or regulatory bodies, addressing the needs of investors, or facilitating internal comparisons.
Typical features of software in the area of parallel accounting include:
- Standard Selection: Ability to choose between different accounting standards such as IFRS (International Financial Reporting Standards) and GAAP (Generally Accepted Accounting Principles).
- Data Management: Capture and management of financial data and transactions in multiple accounting systems.
- Calculations and Conversions: Automated calculation and conversion of financial data according to the respective accounting standards.
- Reporting: Generation of reports and financial statements according to the requirements of different accounting standards.
- Comparative Analysis: Ability to compare financial results and metrics between different accounting standards.
- Compliance: Ensuring compliance with the respective legal and regulatory requirements for each accounting standard.
- Audit Trail: Ensuring traceability and auditability for all financial transactions and reports.