普华永道中石油财务信息系统设计

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1、PetroChinaRequirements and design of FMIS modificationsFMIS enhancement projectDecember 19991Contents1.Business requirements32.Gap analysis103.Overall approach and design principles134.Business process overview155.Overview of system changes186.New data files and associated processes247.System proces

2、ses for consolidation and reporting29Appendix A-Report formats322System Design for FMIS Modification2 System Design for FMIS ModificationBusiness requirementsChapter 13System Design for FMIS ModificationTo be able to do an IPO,PetroChina need to be able to produce certain key financial reportsTo pro

3、duce these reports,some changes to FMIS needs to be implemented.Business requirement overviewThe FMIS system need to be able to produce the following reports:nAnnual consolidation reports as required by China Finance Ministry based on the PRC GAAP for joint-stock company.nQuarterly consolidation of

4、reports of the overall ListCo based on the IAS is required for publicly listed companies.nDisclosure items are also required by IAS and PRC GAAP for joint-stock company.nSome other information is required to support annual auditing.All the above reports(except the audit information)will need to be p

5、roduced along the new PetroChina organization structure as described in the following page.The above reporting requirements are detailed in the next pages.4System Design for FMIS ModificationPetroChinaLevel 1PetroChinaLevel 2SpecializedCo/Business GroupLevel 3SegmentLevel 4TypeE&P.Level 5BusinessUni

6、ts.Gas&PipelineDownstreamOil&GasE&PNatural gas(inc.gas pipeline)Refining&MarketingPetrochemicals&marketingOthersRefiningPetroChina reporting structureMarketingR&DChina oilHQBeijingE&PHuaBeiG&PHuaBeiRefineryHuaBeiNorth ChinaPetr.TradeChina O&GresearchinstituteLevel 6OperationsUnitsLevel 7Suboperation

7、sUnitsOil field#1Oil field#2Oil field#3District 1District 2District 35System Design for FMIS ModificationPRC GAAP consolidation report requires the following data:Business requirements for PRC consolidationlIndividual PRC GAAP reports of all entity involved in consolidation.lBalance sheet(PRC GAAP)l

8、Income statementlCash flow statementlInternal transactions reportslInternal transaction listInternal product sales or purchase reportInternal rendering of service report or internal service purchase reportInternal long-term equity investment report,capital structure reportInternal payable or receiva

9、bleslRequired information for internal transactionsCounterpart,transaction type,period,beginning balance,credit amount,debit amount,ending balance6System Design for FMIS ModificationThere are two types of changes that need to be made to comply with IASBusiness requirements for IAS consolidationlPRC

10、consolidated financial statements with specific detailslIndividual PRC reports listed earlierlLedger reportlTransactions with different accounting treatment in IAS and PRC GAAPlDevelopment costs-E&P segment specificCost of successful well(succeeded in the period)lAssets and depreciation(straight lin

11、e method vs UOP)and related tax creditAssets class,accumulated depreciation amount based on reevaluated carrying amount by straight line method;depreciation amount based on un-reevaluated amount by unit of production method or straight line method(depend on assets class)lDeferred business initial co

12、st(pre-operation expenditures)Beginning balance,ending balancelMonthly revaluation of non-current monetary assets&liabilities(foreign currency item)Historical value(calculated by exchange rate of occurring date),reevaluated value of long-term loan(foreign currency),long-term deposit(foreign currency

13、),other long-term monetary assets or liabilities.7System Design for FMIS ModificationIAS and PRC GAAP requires the following items for disclosure purpose:Business requirements for disclosure purposeslAging report of accounts receivable(PRC GAAP)lLong-term equity investment(PRC GAAP)Investee,stock ty

14、pe,share number of stock,share percentage,amount,remarkslLong-term bond investment(PRC GAAP)Bond type,par value,rate,purchased amount,due date,interest of this year,accumulated interest,remarkslOther non-equity long-term investment(PRC GAAP)Debtor,principal,rate,due date,interest income of current p

15、eriod,accumulated interest,remarkslLong-term loan(PRC GAAP)Loaner,amount,due date,rate,term(If foreign loan)Foreign currency amount,RMB amount by exchange rate of balance sheet datelBonds payable(PRC GAAP)Bond name,par value,issued date,issued amount,due date,interest expense of current year,accumul

16、ated interestlRelated party transactions(PRC GAAP&IAS)All data listed in internal transaction reports,only different entity namelIncome analysis report(IAS)Special deductions relating to exploration and production activities,Income not subject to tax;Expenses not deductible for tax purposeslMovement

17、 of allowance for doubtful accountsBalance at beginning of period,Provision,Deductions,Balance at end of period lMovements in allowance for diminution in value of inventoriesBalance at beginning of period;Provision;Deductions;Balance at end of periodlMovement report of PPE&accumulated depreciationnC

18、ost:Beginning balance,additions,disposals,ending balance;nAccumulated depreciation:Beginning balance,charge for the year,disposals,ending balancelMovement of allowance of investment value diminutionBeginning balance;Provision;Deductions;Ending balancelLoans Analysis ReportlDirectors remuneration rep

19、ortSalaries,allowances and other benefitsContribution to retirement benefit scheme8System Design for FMIS ModificationFMIS also need to produce certain information that is required to facilitate annual audit.Business requirements for annual auditThe required information for accounts receivable,long-

20、term equity investment,long-term non-equity investment has been listed in disclosure requirement.The only remaining items for annual audit are listed below:nShort-term investmentInvestment type,investee,security type,par value,historical cost,rate,due date,interest receivable or dividends receivable

21、,premium/discount and its amortisationnNotes receivableNotes type,par value,rate,drawer,due datenOther receivableDebtor,amount,post due daysnAssets revaluationAssets class,book value before revaluation,book value after revaluationnShort-term loanLoaner,amount,rate,due datenNotes payableOwner,par val

22、ue,rate,due date9 System Design for FMIS ModificationGap analysisChapter 210System Design for FMIS ModificationChanges in financial reporting processPetroChina needs to implement a large scale change in its financial reporting process.CurrentlConsolidation is done by the auditors using spreadsheets

23、and manual data collection and manipulationlFMIS report is not compliant with PRC accounting standard for joint-stock company.lIAS report is produced by the auditors using manual methodlReporting is done for the whole CNPC with the current org structurelUse current chart of accountsFuturelConsolidat

24、ion will be done by PetroChina accountants as part of the regular accounting process using FMISlFMIS report will be compliant with PRC accounting standard for joint-stock company.lAS report is produced by Petrochina accountants using FMISlReporting structure for PetroChina will be separated from the

25、 old CNPC.New org structure will be put in placelNew chart of accounts will be in effect11System Design for FMIS ModificationSystems issuesThe following systems issues are identified as critical to the ability for PetroChina to be able to do consolidation and produce the required reportsREQUIREMENTR

26、econciliation of transactions that occurs across different accounting entities.Some detailed information need to be passed up the corporate reporting structure.SYSTEM ISSUEThis is difficult to do with the current FMIS since FMIS treats each accounting entity as independent from other accounting enti

27、ties.This is not possible in the current FMIS since FMIS only transfer reports,not detailed information.CONSOLIDATION PROCESSREQUIREMENTIAS report have some different grouping of accounts compared to PRC reports In the interim,CNPC requires reporting based on locations in addition to the“normal”repo

28、rting procedure along segmentDisclosure items need to be produced and rolled upSYSTEM ISSUECurrent FMIS aggregates report up the hierarchy and it is not possible to see or reconstruct the individual accounts,therefore it is not possible to regroup accounts at higher level.Currently FMIS reporting hi

29、erarchy follows a strict tree pattern with one entity reporting to only one parent.Current FMIS can not produce this data nor roll it upREPORTING PROCESS12 System Design for FMIS ModificationOverall approach and design principlesChapter 313System Design for FMIS ModificationDesign principles/goalslT

30、he design has to be implementable prior to the IPOlModified FMIS must be able to produce all required reports with minimal manual worklAvoid major changes in business processlAvoid major changes in FMIS which needs long development time and/or high risk of destabilizing FMISlMarginal changes to FMIS

31、 is preferred to marginal change in business processlChanges in business process or FMIS should have minimal dependency on short-term improvement to IT infrastructure.lDue to current limitations in telecommunication,the amount of data that needs to be transferred should be minimized.lTo ease transit

32、ion,the modified FMIS need to have data compatibility with current FMISThe following principles have been followed in creating the design for the new system:14 System Design for FMIS ModificationBusiness process overviewChapter 415System Design for FMIS ModificationLocationLevel 5SegmentLevel 3HQ Co

33、rpLevel 1LgrLgrLgr+Lgr+IASIASPRCSegment ASegment BElimElimPRCElimIASElimIASElimIASLgr+Lgr+IASIASElimIASElimIASIASDifferent segment,different locationSame segment,different locationSame segment,same locationDifferent segment,same locationLEGENDLedgersReportsModified report/consldtn systemConsolidatio

34、n entryConsolidation fileData flow diagram of rollup processPRCPRCLgrLgrNotes:Lgr+=ledger report plus some otherspecial reports.16System Design for FMIS ModificationRoll up and consolidation process chart1.1 Enter transactionsfor Level 6 HO1.5 Enter same-segment,same-locationelimination entries1.4 I

35、mport reportsfrom level 6HO ledgers1.2 Create reports forLevel 6 HO ledgers1.3 Receive reports&import datafrom level 7(district)1.8 Produce IASadjustment file(IAS file)1.7 Produce BU segmentPRC report1.6 Determine IAS adjustments1.9 Send PRC BU segment reportand IAS Beijing Business group Finance2.1

36、 Receive PRC reportfrom BU Location segments2.2 Enter different-segmentsame-locationelimination entries2.4 Send different-segment,same-location eliminationfile to Beijing H.Q.2.3 Produce Location PRC report3.1 Receive BU segmentPRC report and IAS file1.10 Send PRC report to Location HOfinance3.2 Ent

37、er same-segment,different-locationselimination entries3.3 Produce bus.group PRC report andIAS adjusted report4.1 Receive PRCreport and segmentIAS file4.2 Receive different-segment,same-location elimination files4.3 Enter different-segment,different-locationelimination entries4.5 Produce corporatePRC

38、 reports andIAS reportsBU LocationLocation HOFinanceSegment Finance(Beijing)CorpFinance3.4 Send business group PRC report andIAS corp4.4 Enter IAS adjustments(corporate level)Level 5Level 3Level 117 System Design for FMIS ModificationOverview of system changesChapter 518System Design for FMIS Modifi

39、cationData flow diagram-Transaction systemSome changes are required in the FMIS Transaction system to collect required data from all accounting entitiesExistingfunctionalityTransactionDBEnter accountingentries to FMISProduceLedger reportT1Special disclosureitemsLedgerreports fileF2Disclosure&IASsupp

40、ortingdata fileF1Internal transactiondata fileNewfunctionalityP4Producespecial disclosureitems reportP2Produce internaltransactions data fileP3Enter specialdisclosure&IASsupport dataP1For internal transactions,enter customer/supplier code19System Design for FMIS ModificationNew or modified functiona

41、lities-Transaction systemNew data fileF1-Internal transaction data fileF2-Disclosure&IAS supporting data fileNew tablesT1-Special disclosure itemsNew system processesP1-Internal transaction data entryP2-Internal transaction P3-Special disclosure items&IAS supporting data entryP4-Special disclosure i

42、tems&IAS supporting Changes to FMIS Transaction system is summarized in the following list:20System Design for FMIS ModificationF3Elimination data fileData flow diagram-Reporting systemNewfunctionalityLowerlevelReportsLedgerreportfilesAggregationP7EliminationprocessExistingfunctionalityAggregatedRep

43、ortsConsolidatedLedgerReportP16Export/printconsolidatedledger reportT2EliminationF2Disclosure&IASsupportingdata fileF1Internal transactiondata fileT4InternalTransactionP13ExportremaininginternaltransactionEliminationEntriesInternal transaction&eliminationreports&queriesAnalyze info anddetermine requ

44、iredeliminationP5Query,view,print P14Export disclosures&IAS supportingdataP8Export EliminationentriesF4IASadjustmententry fileF3Elimination data fileLedgerreportfilesF2Disclosure&IASsupportingdata fileF1Internal transactiondata fileF4IASadjustmententry fileP12Export IAS adjustmentP15PrintIAS reports

45、T3IAS adjIAS adjustmententriesAnalyze info anddetermine requiredIAS adjustmentP9Query IAS adjustmentdataIAS adjustmentinfo reportsSome major changes are required in the FMIS Reporting systemP19Import internaltransactionP6Enter eliminationentriesP18Import eliminationentriesP17Import IASadjustmentsP10

46、Enter IASadjustmentsP15PrintPRC reportsP20Import disclosure/IAS support dataT5Consolidationaccount pair21System Design for FMIS ModificationNew or modified functionalities-Reporting systemNew data fileF1-Internal transaction data fileF2-Disclosure&IAS supporting data fileF3-Elimination data fileF4-I

47、AS adjustment entry fileNew data tablesT2-Elimination entry tableT3-IAS adjustment entry tableT4-Internal transaction tableT5-Consolidation account pair tableThe changes to the FMIS Reporting system is shown in the following list:New system processesP5-Query info for eliminationP6-Enter elimination

48、entriesP7-Elimination processP8-Export eliminationP9-Query info for IAS adjustmentP10-Enter IAS adjustmentsP11-IAS adjustment processP12-Export IAS adjustmentsP13-Export remaining internal transactionsP14-Export disclosure&IAS support dataP15-Print IAS reportP16-Print/Export PRC reportP17-Import IAS

49、 adjustmentsP18-Import elimination entriesP19-Import internal transactionsP20-Import disclosure/AIS support data22System Design for FMIS ModificationRequired new/modified reportsPRC report&disclosure requirementPRC Income statement report modificationPRC Balance sheet modificationPRC Cash flow state

50、ment modificationInternal transaction reportAging report of accounts receivableLong-term equity investment reportLong-term bond investment reportOther long-term investment reportLong-term loan reportBonds payable reportRelated party transaction reportIAS report&disclosure requirementIAS income state

51、ment definitionIAS balance sheet definitionIAS cash flow statement definitionStatement of owners equityNote 4 Employee compensation costsNote 5 interest expenseNote 6 Income before income taxesNote 7 Income taxesNote 8 Cash and cash equivalentsNote 9 Accounts receivableNote 10 InventoriesNote 11 Pre

52、paid expenses and other current assetsNote 12 Property,plant,and equipmentNote 13 InvestmentsNote 14 Intangible and other assetsNote 15 Accounts payable and accrued liabilitiesNote 16 DebtNote 17 Deferred income taxesNote 22,23,24Auditing required reportsShort-term investment reportNotes receivable

53、reportOther receivable reportShort-term loan reportNotes payable reportIn addition to the system changes,the following reports must be developed and produced23 System Design for FMIS ModificationNew data files and associated processesChapter 624System Design for FMIS ModificationReporting systemTran

54、saction SystemF1-Internal transaction data associated processesP1.Modification to voucher entry in transaction system need to be done.Currently the transaction table has a field to record customer/vendor codethat is only used for A/R or A/P.The system needs to be modified to make the customer/vendor

55、 code applicable for all internal transaction types.The system should make customer/vendor code entry mandatory for all internal transactions.P2.When counterpart codes of all internal transactions have been recorded,transaction system will be able to export data of internal transactions and transfer

56、 the data up to the higher levels.P5.The reporting system must have facilities for users to query,view and print the internal transaction data and the elimination entries.This report is the key input for the users in the elimination process.Users create elimination entries based on the information c

57、ontained in the internal transaction table.To facilitate the creation of this report,table T5-(Account pairs)is needed to record the account“pairs”for the offseting accounts.This process must also be able to print elimination report which compares the internal transactions with the elimination entri

58、es that has been done.The elimination report must be reported to the higher level as a control report to ensure that eliminations are done properly at the level where it is performed.P13.As part of the consolidation process,the system will filter the internal transactions and roll up the internal tr

59、ansactions information that has not been eliminated by ignoring all the internal transactions within the accounting entity and its lower entities,and roll up the remaining internal transactions without aggregation.The internal transaction data a key input to the consolidation process.F1Internal tran

60、sactiondata fileP2Produce internaltransactions data fileP1For internal transactions,enter customer/supplier codeTransactionDBT4InternalTransactionP13ExportremaininginternaltransactionInternal transactionreports&queriesP5Query,view,print Internal transactiondata fileImportinternaltransactionsT5Accoun

61、t pairsTABLE STRUCTUREF5-Consolidation Account pairSourceacct codeCounterpartacct codeT2Elimination&TABLE STRUCTUREF1/T4 Internal transaction dataPeriodCounterpartcodeSource entity codedebitBeg balcredit debitMovementcredit debitEnd BalcreditAccountcode25System Design for FMIS ModificationF2-Disclos

62、ure and IAS support data associated processesP3The disclosure data and IAS supporting data will be recorded to the special disclosure table(T1).This purpose of this table is to collect data that can not be derived from account balances,e.g.UOP vs straight line depreciation in IAS adjustment.Although

63、 different disclosure types are required for different transaction types,the system will use the same table to store the data.Each field in the table has different meaning for different disclosure type.The disclosure types are pre-defined by PetroChina headquarter and clear instructions to the accou

64、nting entities need to be given about which disclosure types must be filled out by each accounting entity.FMIS should be enhanced to“understand”the different disclosure type and for each disclosure type,the system needs to be able to display a special input screen for the disclosure type to prevent

65、wrong entry to be made to the disclosure database.P4All recorded disclosure data and IAS support data will be exported to a sent up.The then imported to reporting system(P20)and stored in the report database.P9Users review the IAS supporting data in reporting system to produce the IAS adjustment ent

66、ries.P14 All details of disclosure and IAS supporting data received from lower level in reporting system will be exported and sent up to higher level without aggregation.This designed to collect non-ledger data for PRC&IAS disclosures and supporting data for user to do IAS adjustment.REPORTING SYSTEMLowerlevelReportsP14Export disclosures&IAS supportingdataDisclosure&IASsupportingdata filesP9Query IAS adjustmentdataIAS adjustmentinfo reportsTRANSACTION SYSTEMT1Special disclosureitemsF2Disclosure&