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Legal regulations in France!

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Posted on by Scania_Bjorn

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Hey all,

So we are to implement D365 in France, only using the financial parts as in GL, AP, AR, FA, Bank. In our company we have a company specific chart of account with transaction plans defined (Called CFM). We would very much like to keep CFM as the main chart of account / process for all our entities (52 different countries) but we are being challenged by our French colleagues that this will not be possible in France.

Our company is a Finance company, so we are regulated by the Bank of France, making it hard for us to verify if the requirements really are legal, or just local wishes.

Our French colleagues tell us:

1. The Legacy system has to have the French chart of account (PCEC) as the main CoA in their ledger
2. We are not allowed to use our company specific CoA (CFM) as the main CoA , and then solve French reporting via mapping, dimensions, layers, or other clever solutions. Original transaction has to be done against the French CoA, period.
3. They also require one more ledger for IFRS

My question is if anyone here have encountered this when implementing for a Financial institution in France? Or any other country. We are also regulated in Spain, Italy, Brazil and South Korea.

If the above is true , our strategy sort of falls apart as we aim to have one solution for all markets, with mapping/adaptations in the back end to support legal requirements.

Any insights very much appreciate

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MATTGUO 22,351 Moderator on at

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Hello,

As far as i know, the company in the specific country must use the chart of account provided by the country as the first level account. It is the requirement of law and taxation.

And the accounting currency must use the country currency.

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Ties Philippi 960 on at

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Hi Bjorn,

The chart of accounts should be (and is intended to be) as much localized as possible.

If you have company wide reporting requirements you can use the consolidation accounts on the main account setup.

There are two ways of setting this up, you can either use the additional consolidation accounts option (if you have multiple different consolidation accounts), or the default consolidation account (if you have just 1). Given the flexibility I prefer the additional consolidation account option.

That being said however, I have seen it being used the other way around as well, this makes a global chart of accounts possible, but as I said earlier this is not the intended use (and not sure if you will meet all legal requirements by doing this).

When running the (online) consolidation in the consolidation company you have the option to report / consolidate based on the consolidation accounts.

Best regards,

Ties

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Ludwig Reinhard Microsoft Employee on at

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Hello Bjoern,

In addition to the options that Ties already mentioned, I have seen companies used financial dimensions to map their global chart of account to their local French one. That is also often used.

Yet, to come back to your 3 questions in more detail, here some comments:

You can use your global chart of account in D365FO even in France. When doing this, you will, however, experience some pains especially when it comes to audits, reports and data exports that you have to provide for the French government. Using the global chart of account is thus not impossible but will require you to make some 'painful' / expensive adjustments.

Sometimes companies use local external bookkeepers or tax advisors to prepare their French accounting for them. What they do is basically exporting data from AX /D365FO - where they use their global CoA - providing mapping tables and the external advisors are doing all the local accounting for them. That is another option but it also costs you extra money; sometimes quite a lot. So, also here you need a 'deep' pocket if you don't want to use the local French CoA in D365FO.

My personal recommendation would thus trying to use the local French CoA and try to do your mapping to the global CoA and the consolidation elsewhere, i.e. at the reporting level.

IFRS:

Where do you have major differences between local French GAAP and IFRS?

Is your global CoA setup in line with IFRS?

In general there are multiple ways how to account for IFRS in parallel.

To give you a good feedback we would need to have some additional feedback from your side.

Best regards,

Ludwig

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Scania_Bjorn 397 on at

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Thanks for the replies guys, but you're missing the point :)

I am not looking for a technical solution how to set this up, we have several ways of solving that.

My question is if anyone have experience with legal demands for a financial institution in France, and whether the statements from my colleagues is true or not.

I do appreciate the effort though.

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Ties Philippi 960 on at

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Hi Bjorn,

That is where it gets a little bit tricky.

SEPA is officially a standardization but unofficially each country/ bank takes its own view on it with requirements.

If you want to read up on the official requirements you can do so here:

EPC125-05 2019 SCT Rulebook version 1.0

https://www.europeanpaymentscouncil.eu/sites/default/files/kb/file/2018-11/EPC125-05%202019%20SCT%20Rulebook%20version%201.0.pdf

Here you can see that the tag is not mandatory if the payment is within SEPA area.

However my experience is that banks do deviate from this, however most if not all banks have documents available which describe their specific requirements.

Best regards

Ties

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Ludwig Reinhard Microsoft Employee on at

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Hi Bjoern,

In a nuthshell: Yes, your colleagues are generally right that you have to deal with those issues they raised. I hear similar things all the time when it comes to rollouts in France.

How you fix it from a technical / system perspective is then your part as I understand you and you seem to have already solutions for that.

Best regards,

Ludwig

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Cla_ng 7 on at

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Hi Björn, how are u? how have u solve this issue of COA global in France? any suggestion about this? many thanks in advance,

Clara

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