CODA Group, a financial and corporate performance management (CPM) software specialist, urged companies not to be intimidated by the recent round of changes announced by accounting standards bodies and in planned government legislation. However, CODA also highlighted that the first IFRS-based financial statements for most companies will be for the period closing December 31, 2003, implying that changes in accounting procedures need to be made now waiting until 2005 is not an option.
Jeremy Roche, chief executive officer of CODA Group, announced that CODA's applications will support organizations as they change their accounting practices to comply with new reporting standards recently outlined by the International Accounting Standards Board (IASB) and by the U.S. Financial Accounting Standards Board (FASB). These standards are part of a range of new regulations designed to bring formalized control to corporate accounting procedures on a global basis. They are particularly relevant in light of the proposed U.K. legislation that will improve regulation of auditors and give the Inland Revenue powers to “police” U.K. companies involved in accounting abuses.
FASB recently outlined additional changes to remove several differences between U.S. Generally Accepted Accounting Principles (U.S.-GAAP) and International Accounting Standards/International Financial Reporting Standards (IAS/IFRS). FASB plans to adopt several provisions of the (IAS/IFRS). These and other changes should improve the quality of financial reports in the U.S. and help the move towards a worldwide accounting standard based on IFRS 2005.
CODA's Financial Intelligence solutions are designed by accountants for accountants to streamline their closing cycle. This means they have more time to analyze financial results and examine the detailed management information behind them. CODA's unified database and “perpetually closed” approach means that the accounts are always up to date and permanently balanced, with a complete audit trail from transactions to reported results. Because of this, CODA customers can easily meet international standards for shorter reporting windows and more stringent reporting requirements that are specified in the latest round of financial regulations.
They can also feel confident in their ability to produce information on demand as specified in government proposals detailing modifications to UK company law, while at the same time reaping the benefits of aligning strategy to execution to deliver performance accountability across the organization. This alignment not only helps reporting and shareholder visibility, it also promotes objective driven management throughout the organization.
IFRS 2005 is already affecting European companies by creating new guidelines for financial reporting; in the same way that Sarbanes-Oxley is in the USA. As a result, almost all international companies may find themselves subject to changes in accounting processes over the next 12 months. Those companies who expect to adopt IFRS 2005 need to have processes in place that will allow them to report an "opening statement" that will cover the period closing December 31, 2003. Companies governed by FASB have similar procedural changes to implement including:
- Historic cost replaced by Fair-value principles: Companies listed publicly in the U.S. will see an increasing requirement for fair-value measurement of assets and liabilities.
- Voluntary changes in accounting principles: IFRS requires a retrospective application of voluntary changes resulting in all prior periods being restated as if the newly adopted accounting policy had always been used. CODA helps customers comply
- CODA Financial Intelligence will help customers handle multi-period retrospective changes and restatements. CODA's powerful, multi-dimensional nominal code structure eases financial consolidation and reporting processes tracking retrospective adjustments.
- CODA helps customers to increase the speed and frequency of their reporting process, and improve the level of detail. CODA Financial Intelligence is particularly strong in its handling of segment reporting and foreign currencies, and has built-in features that support, allocations, eliminations and minority interest consolidations. These give customers the control over reporting they need.
- CODA Financial Intelligence can assist with calculating new recognition and measurement requirements through its business rule and dimensional flexibility. It also provides an extensive audit trail that fulfils complex requirements.
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