Financial Accounting Advisory Services
Navigating a changing accounting landscape
In the current economic conditions shareholders, regulators and professional bodies are taking greater interest in how companies derive, report, disclose and communicate about their financial position. This environment is driving extensive change across accounting standards.
Companies seeking to optimise their businesses face complexity in both IFRS and US GAAP accounting for mergers, acquisitions, IPOs and carve-outs. Accounting convergence also changes the requirements for reporting on financial instruments, fair value accounting, impairments and revenue recognition.
The current environment requires businesses to be able to address the concerns of their stakeholders and be prepared to change processes in order to adapt accounting and finance practices. This will allow them to ensure they are positioned to respond to market demands both now and in the future.
How can we help?
Our Financial Accounting Advisory Services teams leverage their extensive expertise to bring together global, multi-disciplinary teams. We offer deep sector knowledge to help you navigate the complex finance issues facing your business.
Financial instruments and derivatives
We recognise that every organisation is unique and we work in integrated cross service line, account-centric teams leveraging EY's treasury expertise to provide a tailored solution. In addition to accounting advisors EY's treasury team comprises specialists with expertise in derivatives valuations, commodity trading and risk management, taxation and treasury advisory services:
- Review, development and implementation of hedge accounting strategies under UK GAAP and IFRS
- Accounting advice and transaction support in relation to derivatives and financial instruments in the context of refinancings, capital transactions and business combinations
- Review and analysis of financial instruments accounting policies and disclosures
- GAAP conversions and adoption of accounting standards (including IFRS 9)
- Review, design and implementation of internal controls over the reporting of treasury products and transactions
- Financial reporting controls and processes - review of design and effectiveness, assisting with the development and implementation of controls for treasury financial reporting processes
- Benchmarking reporting processes and controls against best practice
- Financial instruments and derivatives training
- Providing financial instrument accounting specialists on a secondment basis
GAAP conversions require deep technical knowledge of not only accounting differences, interpretations and potential approaches, but also ongoing business implications for performance measurement, compensation schemes, tax, regulation or financial communication. We help clients to:
- Manage conversion as well as interpretations and potential approaches
- Understand the impact of conversion on existing systems and processes and designing new ones, or integrating new processes with existing systems
- Provide project management assistance across all work-streams
- Train staff and prepare the first set of IFRS/IPSAS financial statements
- Understand the ongoing tax reporting implications of complex accounting treatments
Transactions, IPOs, and financial reporting assistance
Our team works with you to optimise the transaction outcome by addressing key accounting and regulatory challenges that arise on mergers, IPOs, acquisitions and divestitures including:
- Identifying and analysis of accounting issues
- Analysing financial and regulatory impacts
- Preparing opening balance sheets, carve-out, pro forma or combined financial statements
- Modelling of impacts on future income statements, balance sheet items and KPIs
- Analysing financial communication and competitor benchmarking
- Working with our transaction advisors on valuation projects and determining the appropriate acquisition accounting adjustments.
- IPO readiness
- Post IPO support
Restructuring and asset financing
We assist clients when undertaking restructurings or when financing the purchase of assets in understanding:
- The values at which transfers of legal entities, businesses or assets should be recorded
- The interaction of accounting requirements and the provisions within company law relating to merger relief and group reconstruction relief
- Distributable reserves issues that may arise which could limit future dividends and suggestions on how to alleviate such issues
- The mechanics of merger accounting and acquisition accounting
- The accounting for employee benefit obligations, share awards and goodwill as businesses and responsibilities are transferred between group entities
- Determination of the functional currency of the entities involved
- Accounting for financing obligations involving asset finance and leasing arrangements
- Determining the accounting for refinancings
Accounting standards and regulatory requirements
We support companies in implementing new accounting standards and regulation in their businesses. Our support includes:
- Implementing IFRS for published or forthcoming financial statements including advice on notes to financial statements and adequacy of documentation
- Technical assistance in complex accounting issues and enhance financial information as well as analyzing and improving information gathering process and competitor benchmarking
- Meeting local regulatory requirements under local GAAP
- Identifying reporting needs and the impacts in the implementation phases
- Understanding the impact on accounting information systems
- Understanding the tax implications to assist to proactively control and manage tax reporting requirements and the effective tax rate
- Benchmarking and analysis of prospective impacts of accounting standard developments on financial statements
Accounting and financial processes
The need to improve your business systems and processes can arise at any time. Our team works with clients on:
- Designing and enhancing accounting and financial reporting processes as well as KPIs
- Redesigning accounting processes to ensure effective and efficient control
- Transitioning from cash to accrual basis accounting in public sector organizations
- Monitoring long-term contract performance
- Reviewing sources of loss of accounting control and assist in the implementation of accounting remediation plans
- Enhancing their cost accounting system
The new UK and Ireland financial reporting framework is now a reality. Understanding its impact will help you resolve issues ahead of adoption.
Financial Reporting Outlook 2012 conference summary
Our Financial Reporting Outlook (FRO) 2012 conference (2.5Mb, January 2013) was attended by over 500 senior business and finance leaders from around the world. This report records the insights and updates shared both during this conference, and from a series of Technical Update seminars held across the UK and Ireland, attended by more than 1,000 finance specialists.
Growing Beyond: a place for integrity
Though many companies have intensified their efforts to combat bribery and corruption, our 12th Global Fraud Survey suggest that much remains to be done.