In a recent white paper, “The CFO’s Guide to AI and Machine Learning,” Oracle NetSuite sought to evaluate ChatGPT’s description of how to comply with the ASC 842 Accounting Rules, so they ask, “What steps should I take to ensure my company is ASC 842 compliant? 1”
ChatGPT responded, “ASC 842 is an accounting standard that affects the way companies report leases in their financial statements.
To ensure your company is ASC 842 compliant, you should take the following steps:
- Proper documentation — All intercompany transactions should be properly documented and recorded. This documentation should include invoices, purchase orders, and payment receipts.
- Elimination of intercompany transactions — Intercompany transactions should be eliminated from consolidated financial statements to avoid double-counting or misrepresentation of the company’s financial position.
- Intercompany pricing — The appropriate pricing for intercompany transactions should be determined based on market rates or other industry standards. This helps to ensure accurate financial reporting and avoid tax implications.
- Intercompany loans — Intercompany loans should be properly structured and documented, with clear repayment terms and interest rates.
- Legal and regulatory compliance — All intercompany transactions should comply with applicable legal and regulatory requirements, including tax laws, accounting standards, and transfer pricing regulations. Failure to comply with these regulations can result in penalties and legal issues for the company.1”
The white paper concluded that ChatGPT “understands the regulation, so creating a system that does the work seems well within reach.” ChatGPT also advises not to try following the standard without the necessary system(s) in place to comply.
While AI-based accounting software is rapidly being developed or formulated for existing accounting platforms like Oracle NetSuite, it ultimately will be up to business CFOs and their accountants to monitor the AI work performed.
You can learn more about the upcoming role of AI in the evolution of NetSuite at its website or by attending a free virtual event at 11 a.m. (PST), today, Thursday, Aug. 3, 2023.
You also could consider attending the session, “Here’s What NetSuite is Doing About AI, ML, GPT, and LLM” at this year’s Oracle NetSuite SuiteWorld, Oct. 16-19, in Las Vegas and on-air.
Editor’s note: Grammarly, the typing assistant I use to review my spelling, grammar, punctuation, clarity, engagement and delivery of text identified no less than eight (8) mistakes in the direct quote above from ChatGPT. So while it may be subject content “right on,” it should improve its fundamental writing skills.
Footnotes:
1 – Quotes have been reproduced from the Oracle NetSuite Business Guide: “The CFO’s Guide to AI and Machine Learning.”
Disclosures:
Feature content was adapted from Oracle NetSuite source materials, including the Oracle NetSuite Business Guide: “The CFO’s Guide to AI and Machine Learning.” Adapted content within this Insightful Accountant feature is provided solely for educational purposes.
Oracle NetSuite provides an integrated system including financials, Enterprise Resource Planning (ERP), inventory management, HR, professional services automation, and omnichannel commerce to more than 36,000 customers in 217 countries and territories.
NetSuite and Oracle are registered trademarks of Oracle Corporation, a publicly-traded NYSE-listed (ORCL) multinational corporation headquartered in Austin, Texas (USA).
ChatGPT and OpenAI are registered trademarks of OpenAI, a non-profit operating under OpenAI, Inc. and a for-profit subsidiary operating under OpenAI, LP. OpenAI is headquartered in San Francisco, California (USA).
Other trade names used herein that refer to products registered, trademarked, or otherwise held by their respective owners are referenced solely for informational and educational purposes.
This is an editorial feature, not sponsored content. This article is provided solely for informational and educational purposes.
The publication of this article does not represent an endorsement by either the author or Insightful Accountant.
Note: Registered Trademark ® symbols have been eliminated from the articles within this publication for brevity due to the frequency or abundance with which they would otherwise appear or be repeated. Every attempt is made to credit such trademarked products within our respective article footnotes and disclosures.
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