Financial services
Increasing globalisation of financial markets and the impact of the financial crisis are giving rise to new requirements for risk- and results-based controlling of individual business units and of the entire bank.
At the same time, inconsistent and non-reconcilable profit and loss accounts and management indicators are impeding everyday management business in the financial services sector.
The Financial Services division of FAS AG develops customised solutions together with and for its clients, for a consistent and meaningful view of the company as a whole.
When developing our approaches, we build on our sound professional expertise and practical experience in reporting and international accounting. Methodically correct and compliant reporting is the foundation for a reliable decision-making process.
On this basis, we develop integrated approaches for operational and economic controlling as well as for financial and management reporting.
This also includes timely, continuous and reliable availability of the required control measures. Accordingly, we support our clients in developing efficient and practical processes.
With its focus on accounting and controlling, FAS AG supports its clients on this level, as well in introducing and adapting solution-relevant IT systems and evaluating software and IT providers.
The clients of the Financial Services division of FAS AG comprise financial institutions from all three sectors (private, public, cooperative institutions) as well as investment companies, insurance companies and other financial service providers.
Accounting & regulation
With our core competencies in accounting & regulation we lay the foundations for successful capital market-oriented bank management. Sound professional and reliable implementation is the basis for realising more in-depth controlling systems.
Capital market reporting in accordance with BilMoG, IAS / IFRS and US GAAP
Modern capital market reporting is driven by high complexity and constant changes and reforms in the statutory requirements.
In this context, we support our clients both in the initial conversion and with regard to ongoing issues relating to international accounting according to IAS / IFRS and US GAAP and the new requirements in Germany arising under the BilMoG.
We provide our services in the capital market reporting environment both as part of a purely functional analysis and in combination with the adaptation of processes and systems.
In close cooperation with our colleagues from the Valuation Services division of FAS AG, we prepare expert reports on purchase price allocation (PPA according to GAS 4, IFRS 3 or ASC 805 (formerly SFAS 141) and impairment testing according to IAS 36 or ASC 350 (formerly SFAS 142).
Hedge accounting
With their mixed accounting approach, BilMoG, IAS / IFRS and US GAAP carry the risk of economically unjustified fluctuations in results. To offset such effects, the standard setters have provided for the option of hedge accounting. We support our clients in meeting the requirements of hedge accounting (e.g. effectiveness testing, documentation) as well as in developing a strategy that complies with standards, in order to achieve the highest possible convergence between the business and accounting results.
Impairment according to IAS 39 and valuation of financial instruments
The financial crisis has shown that there are significant demands on reliably determining the accurate fair values of financial instruments.
We support our clients in developing reliable impairment processes as well as in all other issues relating to the valuation of financial instruments.
We prepare valuations at single transaction or portfolio level, as required.
Government, risk & compliance
Our consulting services in accounting are complemented by our core competence in the regulatory environment.
In addition to reporting requirements and Basel II, we particularly support our clients in developing internal control and risk management systems (ICS / RMS).
Performance management
Based on our competencies described under Accounting & regulation and taking into account all relevant, economic components, we offer various approaches to integrated and efficient bank-wide risk management in the performance management segment.
Integration of profit and loss, balance sheet and asset / liability management
Capital market-oriented reporting not only requires proper application of reporting rules, but also consideration of the impact of economic management measurements on the reported result. The financial crisis made it clear that a deterioration in rating can entail huge costs or even jeopardise the company’s ability to continue as a going concern.
In terms of integrating the profit and loss account with the treasury result, we support our clients in developing efficient controlling instruments by establishing a basis for ex-post analyses in the form of a fast and coherent reconciliation between the two sets of results. Furthermore these instruments enable our customers to simulate the impact of possible measures on the treasury result as well on the financial result.
Integrated balance sheet and asset / liability management requires efficient processes which take appropriate account of all key items as well as correct implementation of hedge accounting.
Introduction of performance measurement systems
In addition to conventional types of income calculations, such as break-even analysis, performance measurement systems derived from key performance indicators could make bank management more transparent and therefore more efficient and successful.
We support our clients in introducing appropriate performance measurement systems at bank-wide level as well at segment level.
Integration of internal / external reporting
The most important prerequisite for timely and correct decisions is reliable and comprehensible information. We know from experience that the frequently encountered divergence of balances from various internal and external income calculations undermines the reliability and comprehensibility of decision-relevant information. Furthermore, additional expenses are regularly incurred for the clarification and explanation of differences.
In practice, completely identical results are rare, partly due to the different purposes of reports.
But our experience shows that, in addition to harmonising the results, an institutionalised reconciliation and explanation of the differences increases confidence in reports, identifies possible causes of errors and inaccuracies and therefore simplifies the reporting and decision-making process.
In terms of integrating internal / external reporting, we ensure reconcilability of the profit and loss account with the break-even analysis and the operating income statement, as well as reconciliation of other internal reports, e.g. from risk controlling or trade, with reports from accounting and bank controlling.
Integration of Basel II and impairment
The data generated in relation to Basel II can also be used for other bank management purposes, but often remains unused because cross-divisional data access is not guaranteed.
The impairment process in accordance with IAS 39 represents an ideal example of the reusability of Basel II data by accessing the same database. The values determined for the default probabilities and the exposures of default can be used for financial accounting with only minor adjustments.
Furthermore, the lending process can be harmonised through the skilful exercising of options.
Process improvement
In order to make timely decisions, decision-relevant reliable information must be made available in a timely and reliable manner. In addition to competent staff, this requires efficient and clearly defined processes.
The implementation of technical solutions often also entails a need to adjust and optimise existing processes.
It should be expressly noted that, in our experience, successfully optimising processes does not necessarily incur high costs for adapting IT systems.
Fast close
At first glance, fast close, or the acceleration and optimisation of closing processes, seems to be old news. But in our experience, many institutions have not yet optimised process stability and process times for their regular, if necessary monthly, preparation of financial accounts.
Process reengineering
In process reengineering, we analyse the actual processes of our clients and, as part of a process analysis, define new target processes or identify individual approaches that offer huge potential for optimisation through quick and simple implementation.
Consulting service
FAS AG regards itself as a purely professional consultancy. But, of course, we do not abandon our clients to introduce IT systems that implement our professional solutions without support. We remain on hand with competent professional advice throughout the entire solution implementation process.
Functional support in system migration
In system migrations, we help our clients to define functional requirements in terms of required data bases, processes and simplifications.
Functional support in system roll-out and software valuation
As with system migration, we are also happy to support our clients in rolling out new solutions, starting with the drafting of functional requirements for specifications and the actual system selection, through to the design of functional requirements for the new systems. Due to our functional focus, we ensure the advice we give our clients is completely vendor-independent.
Functional system checks
As part of the roll-out or migration of a system, regular functional tests of the generated results as well as checks for completeness are necessary. We develop with and for our clients an appropriate test procedure and the required test scenarios and provide support in actually carrying out the tests and analysing the results.
