Notes from CIMA/BPP IFRS update, Russell Hotel, London

Changes for periods after 1 Jan 13

IAS 19 employee benefits including holiday pay
IFRS13 Increased disclosure where fair value accounting used

Changes for periods after 1 Jan 14
IAS 27 separate financial statements
IAS 28 investments in assocs and jvs
IFRS 10 consol fin statements. Vodafone is good example of explaining valuation methods
IFRS 11 joint arrangements - looks at control to define ownership

New standards affecting this year
IAS 8 para 28 about new standards adopted this period and effect
Para 30 where has not applied yet but adoption in future will affect accounts
Highlight areas requiring significant estimate or judgement

3i good example for financial instruments

Lease accounting Exposure draft could be effective in 2015
Capitalise if have right to control use of the asset.
Capitalise fair value at acquisition then depreciate
Note that leased asset are to be shown separately from owned assets
Options to renew only taken account of if there is significant financial incentive to extend (but this could be just the moving costs?)

Ifrs4 insurance

IAS 18 revenue published at 2014. Waiting for EU approval.
IFRS 15 Revenue from contacts with customers. Examples Vodafone and Arm Holdings

FRC corporate reporting review key messages - worth looking at.

Project summaries available from IAS website

Efrag website to show what standards have been adopted by EU.

To do:

Read up on FRS 102  uk gaap revised in Aug 14 effective for SMEs from 2016; info on FRC website. Staff eduction notes SEN prefix.
New std on lease accounting

Where it says early adoption permitted - remember needs to be ratified by EU first.

Using Rally to track progress in Agile Scrum projects

Received training from Ernst and Young and I spent my first few days using Rally. Rally is a productivity tool specifically designed for teams delivering projects using the agile methodology. It seems excellent for taking a user story and allowing team members to add tasks to it.  The tasks each have an expected time to complete, which can be easily updated and directly feeds burn down charts both for the whole project and for the individual.

This looks as if it will be a very useful tool for capacity planning, understanding current progress and helping team members to continue to motivate themselves.

Agile scrum training

With one of my projects now moving out of the inception phase and into its first sprint, my team has had some additional training from Ernst and Young. Up until now, we have been working on user stories which are details of user requirements and how to test them. Now we have identified the first user stories that we are going to deliver and each member of the team is now defining their own tasks to help deliver those stories. This is being tracked using Rally (see separate post).

Capitalism: the conflict between performing today and investing for tomorrow

Took part in a professional association cross sector CPD and networking event at the University of Brighton (organised by CIMA). The speaker was John Mardle,

This was a fast paced lecture touching on the following topics:

• capitalism – what is the problem?
• Banks – have they now lost their role as main provider of finance to business?
• Other disruptive innovation to the financial system such as institutional reputation, regulation, capital adequacy stress tests (one in five ECB banks failed the test).
• The financial supply chain: the important link between each part of the chain (suppliers, customers, investors, inventory,CAPEX).
• The reliability of published accounts. Giving Tesco as an example of how unreliable the accounts may be. The purpose of accounts is to inform investors but companies never want to give bad news. To have more up-to-date information, big investors and other stakeholders may ask for management accounts. These have the advantage of being more up-to-date and possibly designed to be more useful, but are unaudited.
• ITV given as an excellent example of linking KPI's to statements strategy. ITV's accounts apparently well worth looking at as an example of good practice. DHL also given as a good example, they have a long-term issue to do with pension fund deficits and are explaining in their accounts and explaining how they are dealing with it.
• Uncertainty about pension funds and the changes to the rules may affect investment. Pension funds typically look for long-term investment opportunities. If the rule changes mean that more people take their money out of pension funds then they may invest it in other places or may spend it. The effects of this on economy are uncertain, it may give a short-term boost or may even be a longer term boost. Parallels drawn to selling off council houses in the 1980s.
• A brief discussion about ethics. Mentioning Primark which has addressed its negative publicity following the Indian factory collapse by implementing a series of checks on all their suppliers. This led on to a discussion about Apple which controls its suppliers by having bought them all. This though have had its own problems by stifling innovation of those suppliers.

Speaker Details:

John is an experienced trainer and facilitator in Working Capital Management and Optimisation.
Working Capital is no longer financed by traditional means or from traditional sources like banks. Working Capital now requires a strategy that embraces the whole Financial Supply Chain from market penetration, through procurement to service delivery, project completion, balancing production  and then onto invoicing, compliance and reconciliation to cash.

For the past 6 years he has delivered one and two day course for leading UK accounting institutes including CIMA, ACCA, ICAEW, and CAI and for the Association of Corporate Treasurers.
He has developed, facilitated and implemented in-house working capital/cash management courses for the likes of ABB, Alstom, Daimler Benz, Parsons across the globe in the permanent role of Working Capital Change Champion.

Recent corporate work has included ITV Plc., Astrium and DHL, while in the SME sector working capital strategy has been developed with organisations from all sectors whether it is financial services, manufacturing, construction or telecoms.

John is a member of the Genesis Group that informs and influences the Bank of England Monetary Policy Committee when it meets quarterly and in that capacity he also regularly meets leading MP’s like Vince Cable and Michael Fallon. John has also been a panellist and facilitator at recent Lloyds FD Game plan events and regularly submits articles that are published in the likes of GTnews, Treasury Today, CIMA FM, FX-MM, and is an expert on ‘Managing the Financial Supply Chain’ (re-the transactional efficiency and change management of Working Capital) the bi-annual publication of the same name is due January 2014.

As a contributor to many discussion groups like the Institute of Credit Management, Purchasing Insight, Supply Chain, Strategy Management Forum John brings governance, corporate social responsibility , integrated reporting, evidence based narrative and board level cash sustainability via graphics and working capital reports to bear on many strategic decisions driven by working capital management.

Attendance certificate here.