What is Statutory Reporting?
Producing the financial reports that laws and regulators in each jurisdiction require a company to file.
Definition
Statutory reporting is the preparation of financial statements and disclosures that comply with the legal and accounting requirements of each country in which a company operates, such as filings to companies registries, tax authorities, and regulators. The format, content, accounting standard, and deadlines differ by jurisdiction, so a multinational must satisfy local GAAP or IFRS as well as group reporting needs. This often means maintaining local books that differ from management or group reporting in areas like depreciation, provisions, and currency. Accuracy and timeliness are mandatory, as non-compliance brings penalties and legal risk.
How Statutory Reporting Works in ERP
An ERP supports statutory reporting by maintaining parallel or secondary ledgers that apply local accounting rules alongside the group standard, and by mapping local charts of accounts to required statutory formats. It generates jurisdiction-specific reports, tax filings, and increasingly mandated e-invoicing and digital tax submissions. Localisation packs or country extensions provide the formats, languages, and rules each territory demands.
ERP Vendors with Strong Statutory Reporting
Frequently Asked Questions
Why might local statutory books differ from group reporting?
Local jurisdictions can mandate different accounting treatments for things like depreciation rates, provisions, inventory valuation, and revaluation than the standard a group uses for consolidated reporting. As a result, the same transactions can produce different figures under local GAAP versus group IFRS or US GAAP. Companies maintain parallel ledgers so both views are accurate and supportable. ERPs keep these in sync from the same underlying transactions.
How do ERPs handle country-specific reporting requirements?
Vendors provide localisation packages or country extensions that add the legal report formats, tax rules, languages, and electronic filing capabilities required in each territory. These keep pace with changing mandates such as real-time e-invoicing and digital tax reporting. A company operating in many countries relies on broad localisation coverage when choosing an ERP. The breadth and currency of these localisations is a key evaluation criterion for multinationals.