SMEs hit hard by Brexit, the pandemic and the Ukraine invasion now face a spate of steep interest rates hikes as central banks grapple with rising inflation. Neil Hughes offers his advice on how small businesses can weather the storm. The past two years will be remembered as among the most challenging trading periods in living memory, but the story of the personal challenges ordinary business owners have faced and overcome during this time has yet to be written. And, just as the hardworking SME owner had perhaps hoped they might be out of the woods, interest rates are soaring after fourteen years of record low rates. On the face of it, it might seem counter-intuitive that Central Banks should react to the current commodity and food crisis by hiking interest rates. It’s true that, historically, their default response to high inflation has been to ramp up interest rates to reduce the money circulating in the economy by dampening demand—but the current rise in inflation isn’t down to excess demand. It’s down to the supply issues brought on by the war in Ukraine, and labour shortages prompted by the sudden upswing in post-pandemic business activity. Such external factors will prove stubbornly hard to change through interest rates hikes, and their impact on businesses in the second half of 2022 will be significant and two-fold. Firstly, business costs will rise when many can least afford it, taking more funds out of the working capital that is sorely needed to repay arrears that arose during the pandemic. The second impact may be even more hard-hitting. SMEs across many sectors depend on consumer confidence to reach their monthly revenue targets. When confidence falls in response to external factors, such as rising inflation—and, in particular, mortgage costs—discretionary spending tends to fall and SMEs reliant on consumer spending bear the brunt. So, how can they respond to this new threat? First, the agility and flexibility many business owners developed during the pandemic will continue to be essential in the day-to-day running of their business as costs rise. Shopping around has never been more critical. Second, for business owners that cannot see a way out, there are options. My advice is to look into the Small Company Administration Rescue Process (SCARP). Since its implementation, SCARP has seen schemes with creditors – including Revenue – supporting nominal dividends of around 2.5 percent, with the balance of warehoused arrears being written off in full. This is an unprecedented and very welcome show of support from Revenue towards fundamentally sound, viable businesses – who can continue to sustain employment, thereby saving jobs. After enduring a torrid two years, business owners need all the help they can get. For many, the SCARP process could be the lifeline they need if rising interest rate prove to be the last straw. Neil Hughes is the Managing Partner of Baker Tilly and author of A Practical Guide to Examinership.

Marketing has always been fast-paced, but over the last few years, it has gone into overdrive. Anna Stella outlines seven key marketing trends you should follow to stay ahead of the curve.                   Marketing is in a continual state of progression, escalating rapidly through the post-pandemic era. Thriving in the business landscape of today calls for a new approach and a shift in understanding client needs underpinned by a more accomplished customer experience.  Here are seven marketing trends you need to be aware of to ensure your practice stays ahead of the curve in the fast-paced world of marketing.           1. Digitise your services While e-commerce has been around for decades, it is now becoming more relevant to business services due partly to the pandemic and a shift to virtual and hybrid working models. Accounting practices can and should consider creatively digitising their services, reinventing new online services that can tap into unchartered geographies and sectors of their market. 2. Outsource your marketing Recent years have seen unmistakable demand for multi-channel activities and tailor-made service marketing growing in complexity. As a result, marketing strategies and activities have become more diverse as part of the complicated process of winning new clients.  Small accounting firms lacking in-house expertise and resources are increasingly outsourcing their marketing to boost efficiently and productivity.  3. Automate your marketing Automation does not require an advocate – it makes its own case – yet small firms can sometimes fall behind here. Automated technologies streamline marketing efforts by using a single platform for multiple channels— e.g. social media marketing, managing adverts, and reducing time spent on repetitive tasks. According to Nucleus Research, a Boston-based research institute, marketing automation can deliver a 14.5 percent increase in sales productivity and a 12.2 percent reduction in marketing overhead overall. 4. Customer-driven engagement While winning new clients is essential, most businesses make the majority of their revenue from existing clients and recurring contracts. Customer engagement is all about building a solid relationship with your customers, fostering loyalty and winning referrals. Strategies for busy practices include building and sharing your brand voice, using relationship marketing, personalising your customer experience, and creating content based on your customer history.  5. Content marketing Content is not just words strung along in a row – there must be a purpose. Your content must represent your firm's values of credibility, knowledge, trust, and integrity, encouraging confidence in your abilities.  Successful content requires the 'right stuff' – writing according to the client's needs and within the right time frame. It must be fresh, relevant, appropriate, and brief. Trending content marketing formats for accounting firms include industry and tax updates, thought leadership, and case studies. 6. Digital communication Another area impacted by the global pandemic has been the way we socialise and communicate. With in-person gatherings and meetings severely limited under social distancing measures, we went from face-to-face interactions to digital communication.  This opened up a myriad of opportunities in digital communication for accounting firms. To really reap the benefits here, you must think strategically. Marketing must focus on the strengths of digitalisation to better reach new clients and potentially upsell to existing ones. In a recent study by McKinsey, business-to-business clients were shown to have a minimum of six interactions across various marketing channels before committing to a purchase. Before a client gives you a call, they might Google your business, read through your social accounts or visit your website. Your digital footprint must be pristine, therefore, and your marketing targeted appropriately.           7. Social responsibility – a paramount priority Sustainability is one way an accounting firm can be recognised as a different kind of organisation. If you demonstrate fervent and genuine public support of sustainable practices in business, clients can be influenced to discover their own green footprint. Aiding in the race to meet climate goals, your firm's sustainability legacy will stand alongside eco-influencers and content creators in raising awareness of the need for change for the next generation. Anna Stella is CEO of BBSA, a marketing outsourcing agency.

2022 is the year of the long-awaited overseas holiday for many. But how do you switch off before you go, and how do you switch on once you’re back? Moira Dunne has the answers. For the first time in two years, many of us are finally able to take that much longed-for holiday overseas. We will soak up the sun or visit a city we haven’t seen in a while, and it will be a tremendous relief after two years of caution. The days leading up to holiday are often the busiest of the year, however. We become super-productive as we crack through our to-do list in an attempt to clear everything before we leave. We want to ensure that we have communicated with everyone, turned on the out-of-office message and tied up any loose ends. We become super-focused, less likely to get distracted and intent on making the most of our time. In contrast, our focus is usually low during the first few days back at work. After switching off during our break, it can be hard to get back into it. My advice for getting around this is to capitalise on the high-focus period before your break to plan ahead and make your return to work a little easier. Here are some more tips to help you be productive before and after a holiday. Capture everything before you go Before you finish up for your holiday, take note of what needs to be completed. This is a great time to make your ultimate to-do list – a central place for all those tasks, ideas and plans. A good to-do list will allow you to switch off quickly once you finish work and not worry about your tasks while you’re away. When you return to work refreshed, this list will also help you get back up to speed more quickly. Plan for the first week back Think ahead to how your first couple of days back at work are likely to pan out before you finish up. Some people like to ease into it with a low-key schedule, while others prefer the opposite approach. I recommend arranging a couple of key meetings to kick-start you into productivity mode more quickly. The first morning back at work can be especially challenging, but by the end of the day, you can be proud of your productivity and feel confident that you’re back into the swing of things. Resume your routine It can take some time to get back into productive habits when you return to work. The most important thing you can do is try to resume your daily routine on the first day back. Set your alarm for your normal wake-up time, follow your typical morning get-ready schedule, and catch your regular train or bus to the office. Help yourself return to healthy eating habits with a visit to the supermarket to stock up on lunches and snacks for the work week. And why not motivate yourself to return to good routines by arranging a treat at the end of the week? This will give you something to look forward to as the post-holiday blues take hold. So, have a great holiday and enjoy it, safe in the knowledge that you’ll be on top of everything once you’re back. Moira Dunne is Founder of beproductive.ie. Productivity and personal effectiveness have never been more important as people try to manage their workload between work and home. Moira provides one-to-one coaching programmes and now has a self-paced productivity masterclass.

The EU’s IORP II Directive is drastically changing the landscape of pension plan management and trustees. But what are the changes, and what are the impacts of these regulations? Munro O’Dwyer dives in. The IORP II Directive (IORP II) is reshaping the management of pension plans and represents a perfect opportunity for employers to challenge the status quo. Employers are rethinking how they can deliver a quality pension plan that makes a real impact for employees with a focus on design, performance and support. The status quo The management of pension plans involves time, resources and money. The ultimate responsibility lies with the trustees, whose fiduciary duty is to act in the interests of the pension scheme members. Employers, as sponsors, will nevertheless have a vested interest in the overall management of the plan and the appointed service providers. In an IORP II world, we will see the need for more trustee and subcommittee meetings, newly established risk and internal audit functions, own risk assessments, assessments of fitness and probity, and a comprehensive suite of policies and procedures that must be maintained. Employers must also factor in the additional time needed to prepare for supervision and/or intervention by the Pensions Authority as it rolls out its inspections. The additional level of work—and possibly cost—required to coordinate these services should not be underestimated. This cost will be borne on top of the usual annual compliance costs that come with benefit statements, the trustees' annual report and accounts, audit and European Central Bank (ECB) reporting, for example. This begs the question: could an alternative approach to managing pension plans be at least as, if not more, effective? Employers deciding to transition to a master trust see the change as a means to revisit their pension governance model. A new (and improved?) governance model So, what would pension plan management look like in a model where all the regulatory burden is dealt with by a master trust? In brief, very different. Let's consider some of the key differences: 1. Outsourced regulatory compliance This is fully outsourced to the master trust trustee board, which is supported by advisors from the master trust founder. The trustees will oversee compliance, and the Pensions Authority will look to regulate master trusts closely as they continue to scale. 2. Reduced regulatory workload There would be an immediately reduced workload as services are bundled through the master trust. For example, there would no longer be a requirement to produce an audited trustee annual report and accounts. Nor would there be ECB reporting requirements or a need to appoint key function holders – all of which would be addressed by the master trust. 3. Monitoring and oversight This takes on a new light as a newly established pension committee can focus on the performance of the pension arrangement and the benefit it is delivering for employees and pension scheme members. Employers can spend time creating a pension proposition for staff and ensuring that the master trust remains market-competitive. 4. Clear separation In a master trust framework, there can be a greater division between those providing the advice and those providing the solution. This avoids potential conflicts of interest and allows for a more independent monitoring framework, which can be created through an employer-established, non-statutory pension committee. The reduced regulatory workload allows for the time invested in supporting pension provision to be focused on the employee experience – ensuring that communication programmes are tailored, that engagement levels are high and that the pension arrangements are delivering the outcomes expected. There is now an opportunity for employers to challenge the status quo and rethink how their pension plans will be managed. In doing so, it could bring about positive change for all stakeholders. Munro O'Dwyer is Pensions Partner at PwC.

Despite the recent doom and gloom around a looming recession, it may not be as bad as we think. Mark Nash explains why. "The report of my death was an exaggeration," Mark Twain quipped after newspapers mistakenly published his obituary. We can probably say the same about the prognosis of recession swirling in the financial markets now. There is no doubt the backdrop for growth is challenging. China's stringent zero-COVID policy continues to disrupt supply chains, and the Russia–Ukraine war has pushed up commodity and food prices. However, recent indicators from the world's two largest economies have not been encouraging. The US economy unexpectedly contracted in the first quarter, while a survey of purchasing managers signalled a deceleration in business activity. Meanwhile, China's growth engines are stuttering, with industrial production and retail sales declining in April, reflecting the COVID-19 lockdowns. Consumer behaviour A full-blown recession is unlikely as the labour market is still very tight, and the reopening of the world will also spur demand. Consumers have amassed a war chest of savings during the pandemic, and governments have not stopped spending as they seek to address the cost-of-living crisis stemming from high food and energy prices. Even the travails of some retailers could be due to overly optimistic demand projections rather than a lack of purchasing power. Another factor we need to account for is a switch in consumer behaviour as the world emerged from lockdowns. At the height of the pandemic, many developed countries saw increased consumer durables spending, straining supply chains and boosting inflation. Now, we are seeing an increase in spending on services, which may rise further in the summer months as travel and tourism pick up, resulting in spending on airlines, hotels, and restaurants. This shift in consumer behaviour from goods to services can mask demand and confuse policymakers. The strength of commodity and energy prices that we see now could reflect underlying demand and scarcity. Energy prices could rise further if China stops enforcing its strict COVID-19 policy, releasing an extra uplift to the global economy. Inflation conundrum  China’s slowdown will be due, primarily, to its COVID-19 policy. Therefore, there is some chance that it will end up looking slightly better than current expectations. Global growth would get a considerable boost if China reduced restrictions, eased financial conditions, and opened its economy. I expect inflation to ease in the year's second half as central banks focus more on lifting real rates than growth. The statistical base effect and weaker growth in China and Europe may help subdue headline numbers in the coming months, which could trigger a risk rally. However, inflation could be stickier than the market generally expects and may remain above target as we head into 2023. Financial conditions in the US have tightened as inflation concerns pushed yields up and most of the world reeled under weaker growth, strengthening the dollar. But the strength of the world's main reserve currency may begin to fade if growth also picks up elsewhere, prompting the Fed to increase rates. Yield curve  Many investors point toward the flat/inverse nominal bond yield curve as a predictor of recession. But the real yield curve, which is still upward sloping, suggests the central banks need to tighten more. Considering heightened geopolitical tensions and the threat of higher energy prices, the next few months will be crucial. Mark Nash is Head of Fixed Income Alternatives at Jupiter Asset Management. The article are the sole views of the author. This article was originally published in FM Report.

The gender pay gap has always been on the agenda, but now that Government are introducing legislation around reporting and regulations, it’s a necessity rather than a luxury. The topic of the gender pay gap isn't anything new, but what is new is the Government's introduction of the legislative basis for gender pay gap reporting and regulations. On International Women's Day 2022, Minister for Children, Equality, Disability, Integration and Youth, Roderic O'Gorman, announced the introduction of gender pay gap reporting in the Republic of Ireland. Employers will choose a 'snapshot' date of their employees in June 2022 and must report on the hourly gender pay gap for those employees on the same date in December 2022. This will need to include the mean and median hourly wage gap, data on bonus pay, the mean and median pay gaps for part-time employees and employees on temporary contracts, and the proportions of male and female employees in the lower, lower-middle, upper-middle and upper quartile pay bands. This reporting requirement will help ensure pay transparency exists in organisations and will play an essential role in achieving gender equality in the workplace. The reporting is a landmark victory for the fair pay campaign, but it will not be without its challenges for employers. Gender pay gap reporting in Northern Ireland The UK's law concerning gender pay gap reporting was set out in 2016. However, due to the collapse of the Northern Ireland Assembly in 2017, the subsequent publication of the regulations did not happen. There was hope that there may have been some movement on this critical issue after the recent assembly elections, but as it stands today, it looks like we will still be waiting.  It is now regarded as good practice, with or without the legislation, to publish gender pay gap information, and many organisations in Northern Ireland have already been doing this. However, to get the complete picture and to be able to have the data required to ensure fairness and equality throughout the workforce, we do need to see some legislation enacted.  Challenges facing organisations There are a few challenges facing organisations reporting on their gender pay gap in the north and south of Ireland. Reporting results will either have a negative or positive impact on your organisation, especially regarding staff retention and hiring. Gender pay gaps will likely influence a candidate's assessment of your commitment to diversity and inclusion. Resourcing this reporting requirement will need to be considered – which department is going to handle this? Most will land on HR or payroll, but will they be able to cope with this added workload? Imperfect reporting will also be a challenge. The Chartered Institute of Personnel and Development (CIPD) has compiled research into this area with UK organisations and suggests that inexperience and insufficient technology can mean the output quality is not great. Finally, internal structures, such as flexible working arrangements and child care, etc., are factors that will need to be addressed. The benefits of reporting Even though gender pay gap reporting will challenge organisations, benefits come from this hard work. For one, there can be a cultural transformation through communication, transparency and a policy of fairness and equality that transcends not just pay but every aspect of the organisation. On top of that, by collating and analysing the data gathered for reporting, an equal workforce with equal opportunities, new and improved hiring and promotion methods could be gained to ensure a fair approach. Patrick Gallen is Partner of People and Change Consulting at Grant Thornton.

What can a manager do when they discover that remote working is having a negative impact on one or more of their team members? Rachel Davis outlines five steps they can take to bring about positive change. Remote working has been a boon for some but, for others, working apart from colleagues has led to longer hours, greater stress and mounting burnout. So, what should a manager do when faced with this challenge? Put simply, integrating practical solutions that promote wellbeing within remote team culture is really the only way to bring about sustainable positive change. Since the idea of wellbeing can seem abstract to some, however, there tends to be a lot of corporate jargon surrounding the topic. On top of this, each individual may define wellbeing differently, so cookie-cutter solutions are unlikely to work in any scenario. It is also crucial to note that, where stress and burnout have had serious repercussions on an individual’s mental health, there is no substitute for professional medical help. Ideally, organisations should explore and provide a range of initiatives to meet the wellbeing needs of a diverse team, taking into consideration which combination of the following actions might best suit the their own team.  Let's talk in more practical terms, though. Here are five actions leaders can implement today to help bring about positive change. 1. Communication Start simple and promote open communication within the team at all levels. Start with weekly leadership-endorsed team meetings. These provide structure for a team and help showcase leadership commitment to ongoing wellbeing conversations. Layered on top of these formal meetings, more casual placeholders, such as bi-weekly cyber coffee catch-ups, can provide a safe space for open conversations without the pressure of an agenda. 2. Sports and social Encourage clubs and groups which are not necessarily related to work. Team members can create long-lasting connections and improve their physical and mental wellbeing by coming together to support their common interests. For example, the KPMG Cyber Running Club popped up quickly once the lockdown set in. As team members used their lunch hour to post about their daily run, conversation flowed more easily in team catch-ups as there was already an established connection. 3. Mental health toolkit As mentioned, wellbeing is a very individualistic notion, and some people prefer an approach that isn't focused on socialising. Apps provided by corporations to their employees and families can be a great tool to help improve mental health and wellbeing. Key features to look for include: self-guided programmes and bite-sized interactive courses to help improve sleep and relationships, reduce stress or manage anxiety; in-the-moment exercises, including mindfulness meditations, sleep melodies, healthy recipes and more, which help boost your day-to-day wellbeing and health; and insights to assess how well you're doing, such as questionnaires and mood diaries. 4. Team challenges Endorsing team challenges such as step-a-thons, 30 days of meditation or yoga, and bake-offs can spark friendly competition and encourage communication. It also can break down the barriers of team hierarchy and inspire all levels to learn from each other. These challenges can bring a sense of community, motivating teams to monitor and support each other's wellbeing.  5. Surveys and feedback Visibly responding to, and following up on, feedback from monthly workplace satisfaction to wellbeing surveys could show team members that leadership values and trusts their opinions. To help achieve a cultural change, team members may need to feel empowered and supported by leadership to take responsibility for their wellbeing. The positive feedback loop should not be underestimated and can support long-lasting positive change within a team.   When it comes to the package of wellbeing initiatives, the most important thing to recognise is that these are long-term efforts. Give them time to materialise. Often, you won't realise you have a strong wellbeing culture until you're already deep into it.  Rachel Davis is Senior Consultant in Cyber Security at KPMG.

With the rise of cryptocurrency, crypto-assets, and NFTs, the tax treatment of these transactions is coming under increasing scrutiny from both Revenue and asset holders. Cormac Kelleher explains. Ever since Bitcoin launched in 2008, the concept of a decentralised currency has continued to gather pace among certain segments of the online and trading community. This, along with the advent of newer crypto-assets, such as NFTs, has brought gains and losses incurred in the crypto sphere to the attention of Revenue. Right now, over 7,500 cryptocurrencies and thousands of NFTs are available to buy or invest in. While the market for crypto-assets is growing, however, asset values are highly volatile, and profits and losses can be substantial.     Income vs corporation tax The oft-asked question about transactions involving crypto-assets is whether the transaction should be subject to income/corporation tax or capital gains tax (CGT). CGT should apply to transactions involving crypto-assets where the asset has been held for investment purposes. The “Badges of Trade”, the well-established set of guidelines laid down by the courts in various cases decided over the years, should be consulted when determining if the income should be treated as a trading transaction.  Case law on the sale of traditional shares provides that, even if shares are traded regularly and in an organised fashion, the transaction may still be considered an “investment” instead of a “trade.” The position will depend on the exact fact pattern of the disponer.  Where a company is deemed to be a trading entity and carrying on a trade of investing in crypto-assets, the profits from the sale should be subject to corporation tax at the standard rate of 12.5 percent. If the trade is carried on in a personal capacity, the individual may be taxable at their marginal rate of up to 55 percent. Capital taxes Should a transaction be subject to capital gains tax, the chargeable gain should be taxable at the standard rate of 33 percent. The gain may be mitigated by any other capital losses the disponer may have carried forward or realised in the tax period. A return should be filed with Revenue noting the value of all crypto-assets on acquisition and disposal. As these assets may be viewed as investments, the inheritance or gift of crypto-assets should be subject to capital acquisition tax (CAT), which is charged at the rate of 33 percent. The reliefs that apply to acquiring any inheritance or gift should also apply in this instance. Importantly, individuals must remember to include crypto-assets as part of their estate and not merely consider “traditional” assets.    Stamp duty  As the currency exchanges most used are not based in Ireland, such transactions should be outside the scope of Irish Stamp Duty. It is recommended that this be reviewed on a case-by-case basis, however.  Cormac Kelleher is an International Tax Partner at Mazars.

With climate action leading the policy agenda in both Ireland and the EU, all businesses must start to think carefully about how they can cut their own carbon consumption, writes David Cashman. Decarbonisation of all areas of Irish society is at the forefront of public discussion as the economy recovers from the pandemic and energy costs rise. The Government has laid out ambitious climate action objectives aligned with the EU’s transformative vision in the European Green Deal. The Climate Action Plan 2021 translated carbon budgets and climate objectives into actions, incentives, and multi-annual carbon budgets kickstarting the roadmap to the 2030 ambition. The plan puts five-year carbon budgets at the core of the transition to net zero carbon emissions by 2050, and further demonstrates the decarbonisation trajectory businesses can pursue in support of this transition. Carbon reduction in business Making your business more green can have benefits beyond the net zero mission. It can also increase resilience and help to reduce costs. To get the most out of the transition here are five key areas to bear in mind: New ways of working and transport: Investing early in electric and low-carbon fleets will lead to more sustainable operations. It will also help you to avoid future carbon-related taxation for petrol and diesel vehicles. Hybrid working arrangements can furthermore help businesses to reduce their travel carbon footprint. More efficient operations: Understanding your energy consumption and gaining insights into your energy profile can help to support more targeted early investment in energy efficiency. EU and Government support for energy efficiency and retrofit programmes will allow organisations to make worthwhile investments. Empowering customers: We can expect customers to become much more active participants in the transition to a greener future. Businesses need to prepare for more sustainability-conscious customers and the need to support a just transition in communities. Embedding digital at the core: Harnessing digital technologies can enhance business resilience to possible disruptions in the future. By accelerating digital adoption, businesses can have the opportunity to deliver innovation in core operations. Holistic sustainability strategy: Considering all elements of the sustainability strategy holistically will ensure that businesses realise the most significant benefit from their investments. Just targeting compliance will lead to incremental improvement, but proactive companies will achieve greater returns over the longer term. As businesses adapt to a world that is transitioning to a decarbonised future, there are opportunities to transform operations centred on sustainability. Ultimately, those businesses that adopt a coherent strategy in responding to the challenges of climate action will be positioned to benefit the most. David Cashman is Business Consulting Director at EY.

The financial year-end can be an overwhelming and stressful time for the audit function. Amy Cradock sets out some steps you can take to help lessen the load and ensure an efficient financial year-end. A well-prepared audit can help to minimise the risk of missed reporting deadlines, added costs and the demands on management. Here are some steps you can advise clients to take when preparing for an audit. Set out a clear project plan In advance of the financial year-end, meet with your auditors or clients, and work out a clear project plan for timelines and deliverables. This can act as a tracker throughout the audit process. Allocating responsibilities A critical part of audit readiness is allocating responsibilities internally. This includes scoping the level of resources and expertise necessary and setting a timeline for project management. Documentation and filing Advise clients to keep all documentation in a secure, easy-to-access location to avoid a scramble when the auditors arrive. They should keep track of debt agreements, leasing arrangements, lawsuits, complex transactions, technology modifications, and contracts with major customers and vendors. Don't leave everything until year-end The financial year-end can often be hectic when trying to complete  month-end and year-end reconciliations. Avoid leaving everything until this very busy time to prepare for your audit. Complete reconciliations and prepare any required information for the audit in the lead up to the year-end. Once you do reach year-end, you will only need to complete reconciliations from that month and any additional required accruals. By doing the work in the lead-up to year-end, you will be able to conduct the audit efficiently and with the proper resources. Identify significant changes Organisations preparing for an audit should consider how their financial situation has changed in the past year. For example: Are there new projects or agreements? Is there more revenue coming in? Have you accesses grants or government supports over the past 12 months? It is also important to note any non-financial changes in the company. Have internal control systems been altered, or have new processes been introduced? Organisations should note these changes as they could indirectly impact the fiscal findings for the financial year. Incorporate lessons from the previous year's audit Most year-end audits will have adjustments made and management letter points. These can be a great starting point to help  draw more accurate conclusions for the current year's audit. Schedule a planning meeting with those performing the audit and other decision-makers to see how you can navigate the previous year-end recommendations and improve the accuracy of this year's audit. Communication The auditor and the client should be in constant communication. Frequent communication is key to ensuring queries, questions and requests are addressed promptly to prevent delays while minimising the pressure on everyone. I recommend weekly calls throughout the audit process, with an audit project plan and the use of a tracker to help oversee progress. Inventory For companies performing a year-end physical inventory count, my advice is to plan carefully and educate your teams. Consider counting before year-end and doing a roll forward, with approval from the auditor. Like your year-end sales cut-off, you should also have a solid process in place to ensure proper shipping and receiving cut-off. Amy Cradock is Director of Financial Accounting & Advisory Services at Grant Thornton Ireland.

New laws set to come into place in Ireland will bring significant change for both employees and employers. Moira Grassick looks at pending legislation and what employers can do to start preparing. Employment law is constantly changing, so employers must keep track of what is on the horizon. Current changes to employment laws are a top priority for both Government and the Oireachtas, with a raft of new laws being proposed to deal with everything from domestic violence to probation periods.  Although many of these laws are in their early stages, they are expected to pass, meaning employers must prepare for the changes they will bring about. There is a clear indication that cross-party support on several Bills will have a direct impact on the employment relationship by as early as July and August of this year. Paid leave bills underway The Government recently approved a publication of the draft Sick Leave Bill 2022 providing for up to three paid sick days per year. This is planned to increase to five days in 2024, seven days in 2025 and 10 days in 2026. Under the new rules, employers will need to pay 70 percent of normal wages up to a maximum of €110 per day. This isn't the only new type of paid leave that has been proposed, however. The equality committee is set to discuss a bill to introduce paid leave for survivors of domestic violence. This would allow time off for medical visits, criminal and civil legal proceedings, counselling sessions, or for victims to look for a new home. Tips and gratuities Amendments to the National Minimum Wage bill may soon mean that employees in the service sector will be entitled to all tips and gratuities paid by customers. Up until now, it has been up to an employer to pay customer tips to employees. Service charges could be used to subsidise employee pay, so employers may need to make changes to their payroll system in anticipation. Retirement Older workers in Ireland will also be receiving better government support. Although there is no mandatory retirement age in Ireland, an exception allows employers to introduce it if the reason for doing so can be objectively and reasonably justified. The new Employment Equality (Abolition of Mandatory Retirement Age) Bill 2022 would abolish this loophole, meaning that it would be less likely that older workers would be forced out of work before they chose to leave. Redundancy Lengthy legal battles have led to proposed changes in the rules surrounding redundancy. An amendment to the Companies Bill (2021) and the Protection of Employment Bill (2017) aims to provide preferential creditor status to employees in collective redundancies. It follows the campaign by Debenhams employees to receive their full redundancy pay after the company went into liquidation. Right to disconnect With so many people still working from home, many employees will be happy to hear about the Right to Disconnect Bill. Thirty percent of home workers in Ireland have stated that they regularly work past their contracted hours. This bill would allow all home- and office-based employees to have the right not to work routinely outside normal hours. Stay aware Changes to company climate policies, potential changes to pay rates in specific sectors and a drive to ensure clarity around working conditions will all soon be discussed in the Dáil. Every employer must be aware of these potential changes to comply fully with all legislation. Moira Grassick is COO at Peninsula Ireland. 

To be truly successful in the fast-changing world of work, employers must start to think more strategically about the skills they need now as well as the skills they will need in the future, writes Niamh O’Brien. We are hearing a lot these days about emerging workplace trends and disruptors, such as Artificial Intelligence, smart working, and the gig economy. While it’s clear that all are having a marked impact on how we work and experience the workplace, what is less clear for many employers is how best to factor these far-reaching changes into their ongoing approach to people management. Evolution of technology, processes and skills Technology not only influences the work employees do but can also change the entire working environment—by facilitating remote working and providing access to a broader talent pool, for example, or transforming everyday processes and procedures. As a result, employers must start to think differently about their people, the skills they need right now, and the skills they are likely to need tomorrow. For many, this will require a more strategic, agile, and future-focused approach to managing their talent pool—not just for ‘right now’, but also for the future. Adding to this challenge are the evolving needs and demands of today’s workforce. More people are looking for greater opportunities to experience meaningful work, greater flexibility in their working lives, and more opportunities for personal development, training and upskilling. Employer value proposition To be truly successful, your people strategy must therefore encompass and build on all of these elements, but—no matter how complex or demanding the process of putting it together may be—your future-focused people strategy won’t, in itself, be enough.   As with any strategy, the real challenge often lies in bringing it to life, and it’s impossible to talk about people strategy without touching on Employer Value Proposition (EVP). Your EVP – that is, your employee branding and the way your organisation markets itself to attract talent – is integral to your people strategy. Without robust employee branding, you will lose people to your competition. The only way to gauge an active and engaged EVP is through measurement and KPIs. Keep on top of this and you are far more likely to achieve the desired results. This is because a measurable strategy, with clearly defined KPIs and a cyclical model of assessment and realignment, is far more likely to deliver results. Future-proofing your people strategy Your strategy should also span your entire talent ecosystem, including permanent employees, temporary or contingent staff, contractors, consultants, and gig workers. Only by mapping flexible solutions, which allow you to fill skills gaps in your organisation today and plan for the future, will you be able to implement a truly effective people strategy that can support long-term growth. Niamh O’Brien is Director of Talent Management at BDO.

Over the course of a successful 30-year career in international business, Shane Fitzsimons has refined a tried-and-tested approach to hitting the ground running in any new role. Now CFO and Executive Vice President at AIG Inc in the US, he talks us through the most important professional lessons he has learned over the years. “Keep your ears open, talk to people, pay attention to how things are done around you and adapt.”  For Shane Fitzsimons, the recently appointed Chief Financial Officer and Executive Vice President at American International Group (AIG) Inc, showing curiosity, trustworthiness and commitment to the business’ success really matters in any new role.  Over the course of a highly successful 30-year career in global business, Fitzsimons has refined a ‘go-to’ approach to hitting the ground running in a new position—no matter the business, industry or location. “In a lot of ways, you could say that getting off to the right start comes down to being a good listener. It’s important to go into any new situation with an open mind and be willing to learn about what’s around you,” he says. “Preconceptions will only ever get in the way and, when it boils down to it, people the world over generally share the same motivations. They want to know that they can trust you, that you can get things done, and that the success of the business is your number one priority.” Born in Belfast and raised in Cork, Fitzsimons has risen through the ranks at global companies like General Electric, Tata Group and now AIG over the course of a career that has taken him from Ireland to Europe, and on to the US, and Asia. Profound advice Every step of the way, he has continued to heed the “profound” advice he received at a pivotal point in his early years at General Electric while he was an analyst at the company’s headquarters in Connecticut. “I was about four months into this one-year assignment in Financial Planning and Analysis and I was gung-ho about the role, working 14- to 16-hour days, because here I was at the company’s corporate headquarters with the opportunity to be noticed by Jack Welch (then Chair and CEO of General Electric) and other senior people,” he says. “I wanted to demonstrate my commitment and my work ethic. Then, one day, the head of FP&A called me into his office. He’d noticed the long hours I’d been working. I was expecting praise.  “Instead, he sat me down and said: ‘I see you’re working these long hours and I’ve got to tell you: if you can’t manage the job I’ve given you in less than the working day, I can’t give you anything bigger to do.’” This advice has since become Fitzsimons’ guiding philosophy, he explains: “If you can’t take a job – even the most difficult job – boil it down, simplify it, and improve how it’s done, you’re not ready to move to a more senior role because you haven’t demonstrated a capacity to grow.” Productivity & performance That conversation prompted Fitzsimons to re-think his approach to productivity and performance.  “I had to reflect on how I could use my working time more effectively to do the job at hand while also getting to know other parts of the business. From that point onwards, I started to look at everything from the point-of-view of efficiency,” he says. “It was really quite profound. Even now with my team here at AIG, we have a major focus on supporting efficiency in the wider business.  “We obviously focus on the numbers—on traditional activities like accounting, treasury and tax—but we also see ourselves as an operational partner to the wider business with an important role to play in driving efficiency and supporting strategy and process improvement.” In this respect, Fitzsimons sees finance as an operational ‘enabler’ in business. “We play a very important role in control and governance, obviously, but we don’t see ourselves as the ‘checkers’,” he says.  “That’s why words like ‘expediting’ are so important to me – because finance is an enabler. Our role is really to help the wider business to be successful in the markets in which we operate.” Even at the earliest point in his career, Fitzsimons was already aware of the need to gain hands-on experience in the cut and thrust of the commercial world.  While completing his training with Chartered Accountants Ireland, he worked with Fitzsimons Flynn & Co., the practice run by his late father Garry, also a Chartered Accountant, from three locations in Cork city, Kinsale and Bandon. “I left Ireland pretty quickly. At the time, there weren’t many options to progress your career unless you were willing to travel and accountancy seemed like a very good career to take on the road with you.” From practice to industry Fitzsimons first moved to the Netherlands in 1990 for a six-month assignment with Coopers & Lybrand (now PwC) and would go on to spend a decade in the country, moving out of audit practice in 1994 to join GE Plastics in Bergen op Zoom.  “My father had always said that, to be a really good accountant, I would need experience in industry. He encouraged me to make the move early in my career, so, when I came across a finance role with GE, I decided to take it,” he said. Then a $5 billion subsidiary of General Electric, the US-headquartered multinational, GE Plastics had opened a manufacturing plant in Bergen op Zoom in 1971. By 1994, the site had become a key part of GE’s global operations, serving customers internationally. “I started in general accounting, consolidation, things like that, and quickly realised that, to progress my career, I would need to relocate to GE headquarters in the US and gain experience in areas like FP&A and commercial finance,” Fitzsimons says. He made the move in 2000, spending a year at GE’s Fairfield headquarters in Connecticut before heading southwest to Ohio to take up the role of Group FP&A Leader for Aviation. “That was a huge step up for me in terms of role and responsibility. It was a very formative period in aviation. The industry was heavily impacted by 9/11 and I learned a lot working with leaders like Dave Calhoun (now CEO and President of Boeing),” says Fitzsimons. “I worked very closely with Dave and other great leaders for four years, learning from them, and I was then asked to return to GE’s Connecticut headquarters as FP&A leader for the company. I stayed there for seven years.” Having weathered the worst of the financial crisis helming GE’s FP&A function, Fitzsimons was ready for “something new.” Now aged 44, he had already forged a successful career spanning industry and practice in Europe and the US.  So, what next? “Asia,” says Fitzsimons. “It was missing on my resume.”  When an opportunity came up with GE in Hong Kong, he decided to take it and, in all, spent six years in Hong Kong, initially as GE’s Chief Financial Officer for Global Growth and Operations, followed by Senior Vice-President of Global Operations.  “Then I turned 50 and decided to do what I’d always advised people never to do. I took time off. I’d been working since I was 18. I kind of needed a break. It was the right choice for me,” he says. After his sabbatical, Fitzsimons was on the move again—this time to Mumbai on India’s west coast.  There, he took up the position of Chief Synergy Officer at Tata Sons, the private principal investment holding company for Tata Group, India’s diversified “coffee-to-cars” conglomerate with operations in more than 100 countries. “I’ve moved around a lot over the years and what I’ve found is that there are more similarities between businesses and people around the world than you might expect,” Fitzsimons says.  “Often, you’ll find that the overriding priority for most people is to create a better future for their kids. That’s a very unifying motivation. “Another unifier is that you will always find people in a new company or situation who are willing to help you. Sometimes these folks will be buried in the organisation. They are the people who really want to help the company succeed. They’re willing to accept you early on and help you find your way.” This experience has taught Fitzsimons the importance of getting to know people in any new organisation he joins “at all levels.” “I don’t just want to get to know my direct reports, I want to get to know the people who work for them. I want to get to know people working in other parts of the business. Demonstrating your interest, your curiosity, is really important – and really valuable. People notice it.” An early win An early win can also help to create the right impression in a new role. “It’s important to be able to make a visible difference at the outset,” Fitzsimons says.  “It doesn’t have to be a big win, but it matters that people see it. It lets them know that you have the right intentions; that you’re here to execute and make the company better.” Fitzsimons spent 18 months with Tata Group, leading efforts to create synergies across the group’s diverse set of businesses. “At that stage, it was time to go back to the States. My family wanted to be in the US. The opportunity to join AIG came up in July 2019 and I jumped at it,” he says. Fitzsimons’ first role with AIG was as Global Head of Shared Services, based in New York. At the time, AIG’s Global Chief Operating Officer and Chief Executive Officer of General Insurance was Peter Zaffino, who is now the company’s Chair and CEO. “The shared services role attracted me, but, more than that, I really wanted to work with Peter,” Fitzsimons says.  Global Head of Shared Services was a newly created role at AIG, established to act as a single point of accountability for all key operational and financial capabilities across the organisation. “My biggest motivator right the way through my career has been the opportunity to just dig in and solve complex operational problems as part of a team, and I knew this role would be very operational, which would allow me to get involved in a lot of different aspects of the business,” says Fitzsimons.  “I enjoy breaking problems down into little pieces, finding the right operating cadences and rhythms, and the pure satisfaction you get when you find a solution—especially when you’re working at a pace that’s not necessarily comfortable, but it works.” The value of joining AIG in the shared services role and working with Peter Zaffino as a leader became quickly apparent.  Within five months, Fitzsimons took on the additional role of Global Head of Financial Planning and Analysis and three months after that, he joined the highest ranks of AIG senior management when he became Executive Vice President and Chief Administrative Officer in March 2021—and a member of the company’s 12-strong executive leadership team.  In October 2021, AIG announced that Fitzsimons would transition to the role of Executive Vice President and Chief Financial Officer by January 2022. In his new role as Executive Vice President and Chief Financial Officer, he leads hundreds of financial professionals across the globe who are supporting AIG’s priorities—from delivery on AIG’s financial performance objectives, to the separation of the Life and Retirement business from AIG, the execution of AIG’s budget and capital plans, and proactive engagement with investors and other stakeholders. Future plans & priorities “My biggest career goal now with AIG is to be the best CFO I can be; to cultivate and lead our diverse finance team in a way that allows each member to meet their own aspirations; and support the leaders who have placed their trust in me to be successful,” says Fitzsimons. A member of the Institute of Chartered Accountants Ireland since 1993 and a fellow since 2003, Fitzsimons’ career has taken him from Ireland to Europe, and on to the US and Asia. Despite his success in different industries, however, he didn’t have a “concrete” career plan starting out. “I always had ideas about the experiences I wanted to collect along the way, but I don’t think I ever had a set plan,” he says.  “My father had taught me the importance of gaining industry experience as an accountant, so you would have domain knowledge as a business advisor working in practice, but I found my niche in industry and that’s shaped my career. “Now, ultimately, my priority in my current role with AIG is to eventually leave the business better than I found it. It’s also very important for me personally to build a diverse and high-performing team within the finance function.  “My team is about 60 percent gender-diverse already, which is a high figure for leadership teams in financial services. The goal now is to build on all diversity within the finance team and right the way through the organisation.” Team dynamics For Fitzsimons, a healthy, diverse, and balanced team dynamic is essential to achieving successful outcomes – and there is no place for ‘hands-off’ leadership in this respect.  “Everything is about the team and how the team works together. I actually never use the word ‘manager’ in the sense that colleagues need to be constantly instructed,” he says. “Everyone needs to play an active role. Everybody’s got to have defined responsibilities. They must see themselves and their role as part of the team.” As Fitzsimons sees it, the ideal team should comprise a group of people with diverse experience and backgrounds. “They need to be able to communicate well with each other to be successful and ambitious,” he says.  “I always say that a perfect team has five people on it who think they can do my job and two who probably can. What’s important is the belief that they’re not working in silos and that they’re paying attention to the big picture. It’s a good dynamic.”

Russia’s War in Ukraine changed many assumptions held by European governments, but Judy Dempsey asks is Europe prepared to embrace significant strategic issues that will change the status quo? Russia’s full-scale invasion of Ukraine in February could radically re-shape the European Union.  And it’s about time.  For too long, the EU and most member states were content in the comfort zone that did not have to deal with issues that would fundamentally change their way of doing things. These included energy, security, the future of enlargement and Russia. Until Russia’s second invasion of Ukraine, there was a tactic consensus that Europe could continue along the path of perceiving Eastern Europe through the prism of Russia and depending on Russian energy. The EU accepted the independence of Ukraine, Moldova and Georgia, not to mention Belarus. However, among many big member states, their sovereignty and independence were ambiguous.  While it was never publicly stated, this part of Europe, whose history and culture are unknown to many EU member states, was considered in Russia’s sphere of influence. In several ways, Russia’s all-out attack on Ukraine has changed that perception. First is the energy issue. It is only a matter of time before Europe will wean itself off Russian gas and oil. This dependence had given President Vladimir Putin immense leverage and blackmail over several EU countries, particularly Germany.  The EU, and German Chancellor Scholz’s Green coalition partners, say they now want to become independent from Russian energy as soon as possible. Despite the considerable pressure from German industry and its business lobbies tied to Russia, who wish to retain the status quo with Moscow, don’t underestimate this goal.  The reality is that Russia’s war in Ukraine has become the catalyst for speeding up Europe’s transition to renewable energy and alternative sources of supplies. As dependence on Russian gas decreases, so will the Kremlin’s geopolitical influence. Another impact of Russia’s aggression is security. Neutral Finland and Sweden are poised to join NATO. These two countries that have long cherished their neutrality now recognise that their security needs to be boosted. Joining NATO would fill a big security vacuum in Northern Europe, where Denmark and Norway are members of the US-led military alliance. The Baltic (NATO member) States will be more than reassured with Finland and Sweden on board. In short, Putin’s aggression in Ukraine has given NATO and the transatlantic alliance a new lease of life. It is changing the geo-security architecture of Europe. It will be interesting to see how Ireland deals with its long-standing neutrality stance.  Another big issue is enlargement that is tied to the future direction of Europe. President Emmanuel Macron’s speech at the conclusion of the Future of Europe conference set out how to make the EU more efficient by having a qualified majority voting system for certain policy issues and having a much closer, structural relationship with Eastern Europe.  But what about making the EU more politically integrated? This would require a treaty change that several member states oppose. However, this is where the war in Ukraine comes into play. European governments cannot retain the status quo when its own security and that of its eastern neighbours are at stake.  For a union with ambitions to be a global player, muddling through is no longer an option. It’s going to require a major shift in the mindset of EU countries to end Europe’s comfort zone that, until now, didn’t take its – nor Eastern Europe’s – security vulnerability seriously.  If it doesn’t make that shift, Europe will fail to use the war in Ukraine to develop a strong, integrated and secure Europe – with Eastern Europe as part of that house.  Judy Dempsey is a Non-Resident Senior Fellow at Carnegie Europe and Editor-in-Chief of Strategic Europe.

Dr John McCallig’s research into the accounting system of the future built on blockchain technology and cryptography has earned him a sought-after award for invention, writes Arlene Harris. As Assistant Professor in Accountancy at the UCD Lochlann Quinn School of Business and the UCD Michael Smurfit Graduate Business School, Dr John McCallig has long held a fascination for business, financial systems and the ways in which technology can improve both. Even as a teenager growing up in Claremorris, Co. Mayo, McCallig, now a Fellow Chartered Accountant, recalls an early interest in “the world of numbers” and emerging computer technology. After learning how to programme early home computers, McCallig went on to complete a degree in commerce at NUI Galway followed by a DPA (now Master of Accounting) at UCD.  “My research career began with PhD studies at Lancaster University in the UK and my thesis and subsequent research focused on the relationship between stock market returns and accounting numbers,” said McCallig.  “More recently, I have become interested in how the use of cryptography in business systems could produce better data for decisions by investors, regulators, and the public.” This interest is proving fruitful for McCallig, who was recently named recipient of the 2022 Invention of the Year Award by NovaUCD, the Centre for New Ventures and Entrepreneurs at University College Dublin.  Announced in March at the 2022 NovaUCD Innovation Awards, the prize was given to McCallig in recognition of his research into the use of blockchain technology and advanced cryptography to design accounting systems that could enable transparent access to verifiable data.  Through this research, McCallig has established that building such systems is theoretically possible and could potentially lead to a complete redesign of financial reporting processes in the future. His award-winning invention uses privacy-preserving analytics to collect and share commercially sensitive information about VAT obligations and payments.  This innovation can confirm that the proper VAT payments have been made—in real-time and without breaching the privacy of any individuals or firms involved.  The potential impact of this invention would be to provide the basis for a system that could interact “natively” with the digital economy to help build a modern and fair tax system, according to McCallig.  Now, he is keen to find out more about how his invention might work in practice.  “I have been working with NovaUCD on the commercialisation of my research on the use of cryptography in the VAT reporting and payment system and I am delighted and deeply honoured to have received the 2022 NovaUCD Invention of the Year Award,” he said.  “I appreciate the recognition this award gives to innovative ways of ensuring privacy and data integrity in critical social systems, like the VAT payment system.” Cryptography is the practice and study of secure communication techniques that allow the contents of a message to be viewed only by the sender and its intended recipient. “Many people think of cryptography as all or nothing—you encrypt a file, in which case nobody else can get any information about it, or you leave it unencrypted,” said McCallig. “In fact, modern cryptography provides a rich toolbox of techniques, which can be used to provide partial access to information.  “One example is homomorphic cryptography, whereby mathematical operations can be performed on encrypted data.” McCallig pointed to pay gap research published last year by Boston Women’s Workforce Council in the US, which collected payroll data in a secure manner without revealing information sourced from any individual company involved in the study. “One idea I have been working on myself is how a company’s receivables can be confirmed in a more efficient way,” McCallig said. “This relies on both the company and its receivables encrypting data about the obligations, so that data from the company and the debtors can be compared without revealing the data.” Although he does not foresee a future in which the fundamentals of accounting will change, McCallig is convinced that digital technology will play an ever greater role. “The digitalisation of accounting data in companies is nearly complete. Almost all significant enterprises have sophisticated Enterprise Resource Planning (ERP) systems,” he says.  “The interfaces between businesses are still mainly manual, however, with information being shared using email and PDFs.  “Here, there is an opportunity to design systems that not only allow the secure exchange of information, but also provide access to high-quality information for auditors and stakeholders.” Advanced cryptographic systems are, McCallig believes, ideal for this kind of application.  “I am fascinated by the role of information in business decision-making and resource allocation in the economy,” he said. “Accountants play a key role in providing this information and my interest is in exploring whether advanced information systems could improve the quality of this information.” As he continues his work at UCD—where he teaches financial accounting, financial statement analysis and accounting technology—McCallig is intent on ensuring that the next generation of accountants are fully up-to-speed with the various technologies playing a role in the future of finance. “It has been a privilege to teach and research at UCD and I am hoping to introduce more material on accounting technology, data analytics, blockchains and cryptography into the university’s accounting curriculum in the future.”

The Russian invasion of Ukraine has given rise to potentially complex financial reporting considerations for Irish companies with a presence in one or both territories. David Drought delves into the details of two areas of concern. The ongoing conflict in Ukraine, and resulting sanctions and counter sanctions imposed globally on and by Russia, have impacted certain companies.  Although the conflict is first and foremost an immense human tragedy for those involved, companies whose operations have been affected will need to consider the financial reporting implications.  Here, we consider two potential issues—the first being whether control of subsidiaries located in Russia has been lost, and the second being whether impairment tests of non-financial assets in the affected territories should be carried out. Do you continue to control your subsidiary?  Under IFRS 10 Consolidated Financial Statements, a company (investor) controls a subsidiary (investee) when it has power over the subsidiary, is exposed to variable returns from its involvement with the subsidiary, and can also affect those returns by exercising its power. Control requires power, exposure to the variability of returns, and a linkage between the two. Continuous control assessment  Suppose the facts and circumstances indicate that there are changes to one or more of the elements of the control model. In this scenario, an investor must reassess whether it continues to have control over the investee.  Here, companies will need to consider whether the consequences of the ongoing conflict lead to changes in investors’ relationships with investees in Russia. As a result of the effects of the ongoing conflict, for example, foreign investors may: face difficulties in repatriating funds from investees; exit or cease operations in these markets, either by choice or by being forced to do so because of sanctions imposed; or be impacted by potential new restrictions imposed on foreign owners – e.g. nationalisation of local operations. The hurdle for losing control of an existing subsidiary is generally high, but the loss of control of subsidiaries in the conflict-affected countries or regions should not be immediately presumed.  There is, for example, no exclusion from consolidation due to difficulties alone in repatriating funds from the subsidiary to the parent or the lack of exchangeability of currencies.  In considering the impact of these ongoing conflicts, management must consider these two critical elements of control: power and returns. Power When assessing power over the investee, an investor considers only substantive rights relating to an investee – i.e. rights that it has the practical ability to exercise.  Determining whether rights are substantive requires judgement. Whether there are any barriers due to the consequences of the ongoing conflict preventing the holder from exercising these rights should be considered (e.g. due to current sanctions a company may no longer be able to exercise rights previously available to it.) Returns When assessing returns, an investor evaluates if they are exposed to variable returns from involvement with an investee. The sources of these returns may be very broad and may include both positive and negative returns.  Sources might include dividend or other economic benefits, for example, remuneration for services provided to the investee, tax benefits or certain residual interests.  Management should consider whether the company’s exposure to the variability of returns has been impacted and needs to be reassessed. IFRS 10 does not establish a minimum level of exposure to returns to have control.  Where there has not been a loss of control, there may be other impacts to consider. These might include: possible impairment of the investment in the subsidiary; presentation of the subsidiary as held-for-sale or as a discontinued operation; or  possible impairment of the assets held by the subsidiary. Do I need to test my non-financial assets for impairment? Control in relation to other assets  Before considering impairment for companies with assets on the ground in Russia or Ukraine, it is necessary to assess whether they have, in substance, lost control of those assets.  Control in the context of assets generally means the practical ability to control the use of the underlying asset. If control has been lost, the asset is derecognised in its entirety, and no impairment is carried out. IAS 36 Impairment of assets  The standard requires management to assess whether there is any indication of impairment at the end of each reporting period.  Irrespective of any indicator of impairment, the standard requires goodwill, and intangible assets with indefinite useful lives (and those not yet available for use) to be tested for impairment at least annually. An annual test is required alongside any impairment tests performed as a result of a triggering event. Triggering events  The likelihood that a triggering event has occurred for non-current assets has increased significantly for companies that: have significant assets or operations in Russia or Ukraine; are significantly affected by the sanctions imposed and/or Russia’s counter-measures; are adversely affected by increases in the price of commodities; and/or are significantly affected by supply chain disruption. Impairment indicators  Indicators of impairment may come from internal or external sources, but the likelihood of some impairment indicators existing has increased for companies impacted by the Russia-Ukraine war. Some indicators that may arise include: the obsolescence or physical damage of an asset. For example, plants and operations in Ukraine may be subject to physical damage; significant changes in the extent or manner in which an asset is (or is expected to be) used which has (or will have) an adverse effect on the entity.  a significant and unexpected decline in market value; significant adverse effects in the technological, market, economic or legal environment, including the impact of sanctions on the entity’s ability to operate in a market; a rise in market interest rates, which will increase the discount rate used to determine an asset’s value in use; and the carrying amount of the net assets of an entity exceeding its market capitalisation. Falling stock prices may result in an entity’s net assets being greater than its market capitalisation. Abandonment or idle assets  Companies may have abandoned—or have considered a plan to abandon—certain operations or properties in Russia or Ukraine.  Some companies may have been forced to abandon owned or leased facilities in Ukraine as a result of the war, for example. In such cases, the company needs to accelerate or impair the depreciation of the property based on the revised anticipated usage or residual value. Assets lefts temporarily idle are not regarded as abandoned—for example, when a company temporarily shuts a manufacturing facility but intends to resume operations after military activities in the area abate.  Although temporarily idling a facility may trigger an impairment of that item (or the CGU to which it belongs), a company does not stop depreciating the item while it is idle—unless it is fully depreciated or is classified as held-for-sale. Companies should, however, consider the most appropriate depreciation method in this situation.  Disclosures When reporting in uncertain times, it is essential to provide the users of financial statements with appropriate insight into the key assumptions and judgements made by the company when preparing financial information. Depending on an entity’s specific circumstances, each area above may be a source of material judgement and uncertainty requiring disclosure. David Drought is a director in the Accounting Advisory team at KPMG in Ireland

Delta Partners’ Maurice Roche has Ireland’s next generation of tech unicorns in his sights with the launch of the VC firm’s latest fund, writes Clare O’Sullivan. With the launch of its latest €70 million fund, Dublin-based venture capital firm Delta Partners is targeting the newest generation of promising seed and early-stage technology businesses across Ireland.    Announced in April, the fund is the sixth to be launched by Delta since its formation in 1995. In the years since, Delta has backed over 120 companies, realising a mammoth €1.8 billion.      The new fund is backed by limited partners (LP) including Bank of Ireland, Enterprise Ireland and Fexco as well as the family offices of successful Irish technology entrepreneurs. Bank of Ireland has been an investor in Delta’s previous funds and has a number of initiatives/products aimed at the technology sector. Fexco is a new LP to Delta and widely regarded for its innovation in the fintech sector. Previous companies that have received investment from Delta include Clavis, the e-commerce company sold to London’s Ascential plc in 2017, Neuravi, the Galway-based medtech firm acquired by Johnson & Johnson in the same year, and SensL Technologies—sold to ON Semiconductor in 2018. Delta’s current portfolio, meanwhile, includes Luzern, the Dublin-based e-commerce platform, and Sirius XT, a UCD spin-out developing the world’s first commercial lab-scale microscope. It is a diverse portfolio—and necessarily so, according to Maurice Roche, General Partner at Delta Partners and a Fellow of the Institute. “In a market as small as Ireland, you nearly need to be sector-agnostic as a VC investor. Our main focus is tech, but it makes sense for us to have a range of investments in the broader tech sphere,” Roche said. With the launch of Delta’s latest fund, as many as 30 start-ups will be in the running for funding over the next three to four years. “We will focus on a spread of early stage companies where we aim to be the first institutional investors , i.e. at the early seed stage (companies raising capital to develop the product and prove the value proposition with customers) to late seed (companies raising capital to scale on the back initial customer traction and have early signs of product/market fit),” said Roche. Among all potential investees, a top priority for Delta will be the people involved. “The numbers are important, obviously, but it’s also about the people to a huge extent, the market and the opportunity,” Roche said. “You want to be confident that the management team is capable of developing the product and getting early customer wins. The people behind the product really matter.” A case in point is Richard Barnwell, who recently joined Delta as a partner from Digit Games, the gaming studio he founded in Dublin in 2012. A previous investee of Delta Partners, Digit was acquired three years ago by Scopley, the LA-based gaming company. Another new addition to the Delta Partners team is Amy Neale, who is joining from Mastercard where she led fintech innovation teams globally. “Richard has real start-up experience, and he has been successful, so I think he will be a great support to the entrepreneurs we work with,” Roche said. “Amy is our first female partner and a very valuable addition because she has ‘lived’ in the fintech ecosystem through her role with Mastercard, and fintech is a sector we have invested in, and will continue to invest in, with our new fund.” The fund has reached a first close with Bank of Ireland and Enterprise Ireland as cornerstone investors, supported by Fexco and several family offices. New investors will be added to the fund in the months ahead. “We are extremely thankful to our investors who have entrusted Delta with their capital to invest in the next cohort of Ireland’s early-stage technology companies” Roche added. “This fund will be aimed at what we see as the funding gap for early-stage companies in Ireland. Great Irish entrepreneurs are succeeding across the technology spectrum and the main thing they lack is capital to help them achieve their ambitions,” Roche said. “Our focus will be the start of their journey and helping them to succeed at that foundational level.” A veteran of the VC sector in Ireland, Roche joined Delta Partners at its inception 27 years ago. “I qualified in 1990 and spent some time working in corporate finance where I gained experience advising companies raising venture capital. I was interested in technology, and it was serendipity really that I met Frank Kelly, the founder of Delta, by chance one day playing golf.  “Frank had come back from the States to set up a VC fund in Ireland and he was looking to hire. We got talking and I’ve been part of the Delta story ever since.” In that time, Roche has borne witness to the Dot.com crash, the recovery of the global tech sector, the launch of the iPhone and the rise of the mobile app, and the transition from on-site IT to Software-as-a-Service (SaaS) in an increasingly digital world. “From my own experience, I would say that Irish start-ups have done well in business-to-business (B2B) applications, particularly in fintech and payments,” he said. “We have a very strong entrepreneurial tradition and a lot of very successful companies that have scaled internationally across SaaS and enterprise applications spanning digital health, customer data analytics, customer experience management and many other areas. “We will always be looking at markets ripe for disruption because, where change is happening and new innovations are gaining traction, there is opportunity.” Right now, cybersecurity is one such market rich with opportunity, according to Roche.   “If you look at what has happened in the last few years, businesses have become a lot more conscious of the need to protect their data,” he said.  “We have seen a marked rise in phishing and other cyber-attacks. That has made people much more aware of data protection and privacy. As a result, we’re seeing a lot of money going into cybersecurity, particularly cloud-based offerings.” Another big focus for Roche is fintech. “We have seen just how transformational fintech can be from the consumer point-of-view and person-to-person payments with the rise of digital banking apps like Revolut and N26. “Our main interest here is on the B2B side, because the transformational effects technology continues to have in the enterprise space is enormous and there is a lot of potential there.  “We’ve also seen the speed at which tech start-ups in Ireland like Flipdish and Wayflyer have achieved unicorn status. “With this new fund, we want to find the very best tech start-ups out there waiting to be discovered and give them the funding and the support they need to achieve the global success they deserve.”

Accountancy was well on its way to digital transformation long before COVID-19, but it can’t be denied that post-pandemic, the digitalisation of the profession has come a long way. Five members discuss their firm’s digital transformation and their role within it. David O’Connor Director Sheil Kinnear Our organisation operated, as many practices, did with an on-premises server and that worked well to a point but as demand for more flexibility grew as a response to the pandemic, it became an obvious option for us to take. In partnership with Datapac, moving to the cloud has futureproofed the business. We have learned to be more flexible and conscious of the risks around us. It has become more and more apparent that cyber security is a concern as we move toward a more paperless, digital environment. As a firm that does statutory audits, the ability to securely access our various software tools from anywhere was a huge incentive for us. I think there is an improvement in terms of what can get done no matter where you are. We are also benefitting from superior processing speeds both in the office and remotely. A challenge in our sector now is the transfer of knowledge. It’s huge in our business and people who work remotely still have to pass on that knowledge to trainees and other team members. This takes a lot more structure and scheduling.  I think there is a change towards more flexible working, but we do like to get together as a team and share knowledge and, because of that, it’s going to be hybrid going forward. Emer McCarthy  Group Strategy and Ecommerce Director Kilkenny Group We set up a “Go Digital” initiative a few years ago to transform as a company and become a true omnichannel retailer.  We defined a range of important steps and investments around channels, technology, and organisational restructuring to realise the omnichannel strategy.  We are one of the first to market with our VR store experience, giving potential shoppers worldwide an immersive, in-store experience from the comfort of their own homes. It allows our customers to engage with the Kilkenny Design brand in a completely new and unique way when the way we shop has undergone such a dramatic shift. COVID-19 has driven dramatic change in the digital space, and consumers have adapted accordingly. We have seen a decade of change over the last two years, and businesses need to continuously invest in experiences or processes via digital to meet and exceed the needs of the evolving omnichannel consumer.  Thankfully, we had commenced this journey before the pandemic, which allowed us to navigate an otherwise tricky trading period for bricks and mortar during the pandemic.   Our culture is very open to technology and the benefits that it brings. Embedding technology and new processes bring a level of change management but collectively, our culture has embraced the same by bringing our teams on the journey with us. Our environment has changed the need to adapt quickly to trends. COVID-19 has driven dramatic change in customers’ digital knowledge and use, which expedites the need to roll out pipeline projects sooner and plan to meet consumer needs three years in advance, at least. Louise Heffernan  Audit and Practice Manager Hugh McCarthy & Associates The pandemic exposed a weakness many firms weren’t prepared for and are now forced to adapt to, highlighting how behind some of us were in the digital age, primarily facilitating working remotely and having a strong online and digital presence.  We took this opportunity to begin a rebrand of the firm, working towards moving all systems online and providing additional training where needed.  We understand Rome wasn’t built in a day, but we are in the final stage of an online rebrand, transitioning to a paperless office and entirely cloud-based within four years.  My role in this has been writing and redesigning the website, developing a strategy with the marketing team, working with the IT team to develop a future cloud-based infrastructure, securing software that is online while ensuring GDPR compliance and setting out a four-year plan to go paperless while upskilling the team to ease with the gradual transition. The company has changed in so many ways. While our team chose to come back into the office, there is an option to work from home, providing a higher level of trust amongst the team and strengthening team communication. Giving the option to work from home also shows we value our employees and understand and appreciate the importance of life outside the office. Because of our digital focus, I have changed how I train the team, making sure all resources are available online while developing the team’s IT literacy. And my role has evolved – I now work with marketing and focus on long-term strategic planning while heavily analysing future costs. Bill O’Leary  Director  Goldbay Consulting Four years ago, I introduced accounting software to offshore wind energy consultants, delivering user-friendly automated features. Its reporting capability significantly enhanced the quality, relevance, and timeliness of our management information, which supported profitable business growth.  In March 2020, the pandemic forced us to change how we worked and the so-called “paperless office” had finally arrived.  My organisation implemented video conferencing software. Weekly and operational review meetings, and bi-monthly revenue assurance meetings with directors and senior fee earners were critical in managing revenue and cash flow during the pandemic.  More recently, our focus is on improving operating margin by using data management tools to extract, process and present project margin information in a graphical format to the leadership team. Collaboratively, we review project information, seek to understand the past better and work to agree on actions to modify future behaviour and increase performance.  Leveraging modern software and related digital processes have enabled me to provide the tools, coupled with knowledge, to empower our project leaders to make better informed financial decisions.  The benefits of digitisation and automation of processes are not always linear. As more simple and repetitive tasks are automated, the remaining work becomes more complex – which creates several challenges, such as increasing demands being placed on senior fee earners and the training and development staff becoming more complex.  The answer, which is nothing new, lies in how we use the wealth of digital information available today. How we extract, analyse, synthesise, present, communicate, discuss, understand, and act on the fruits of digital transformation is critical to unlocking the benefits of the digital revolution.  David Heath  CEO Circit At Circit, we have tried to create a culture of digital transformation from the company’s very beginning. With the assumption that technology will continue to evolve at pace, our team is encouraged to be tuned in to what is available in the market and trial services that they believe our organisation and people can benefit from.  This does not mean we implement every new tool we are aware of, but we do become better at monitoring the market, assessing the potential positive benefits of a new cloud service, and getting the timing right for making a change. By having a mentality of being adaptive, we can more easily advise and be an example for our customers who are also on their own digital transformation journey. Lockdowns and viruses have accelerated business trends already underway for companies, like moving to the cloud and modernising their IT departments, but it has also made them think about how their employees can work more efficiently. We’re moving from it being about ‘work from home’ to it being about entirely new ways of doing work.  For example, in the past few weeks, I’ve held investor meetings over video conference instead of in person, with the same – if not better – results.  Instead of thinking about who’s in an office, I’ve also been broadening the scope of who I chat with and when. On an average day, I’m probably talking to five times the number of people from different time zones than when I worked at the office. After all, anyone I want to communicate with is only a chat bubble and video call away. I think we will be forever changed, but now the challenge is to get the balance and team culture correct – one that is digital-first, security risk averse, being personable and willing to travel to in-person meetings to maintain a deeper connection with customers. 

Economic conditions might seems prime for investment, but with a recession on the horizon, Cormac Lucey recommends looking at the global economic outlook before you make any decisions. Capital allocation is a senior management team’s most fundamental responsibility, according to Michael J. Mauboussin and Dan Callahan in their essay “Capital Allocation: Evidence, Analytical Methods, and Assessment Guidance”.  Capital allocation is always important but is imperative today as the return on invested capital is high, growth is modest and corporate balance sheets have plenty of cash.  Unfortunately, there is one key risk on the horizon today that may upend many investment decisions: the prospect of a global economic downturn.  Recessions are one of the most significant risks that confront senior managers. They weaken financial performance and cause company values and share prices to drop. Suppose those drops are accentuated by expensive investments or acquisitions made on the eve of a recession. In that case, they can unleash a search for managerial scapegoats that lead to executives departing their positions “to pursue other interests”.  However, whether one looks at the USA, China or the eurozone, the immediate economic outlook is gloomy. GDP growth has gone negative in America, which recorded an annualised -1.4 percent rate in the first quarter, and that’s before the Federal Reserve’s interest rate tightening campaign began to bite.  April’s US consumer price index surprised on the upside, with the core measure rising 0.6 percent month-on-month, or 6.2 percent year-on-year. With monthly price rises at this level, it will be difficult for elevated base effects from last year to decrease the annual inflation rate. That high inflation data came shortly after labour market reports showed a 20-year record for the ratio of job vacancies to numbers unemployed.  This recent data is only likely to harden the Fed in its resolve to choke inflation out of the US economy. Bill Dudley, a former President of the Federal Reserve Bank of New York, recently warned investors to pay closer attention to the words of Jerome Powell, Chair of the Federal Reserve (Fed).  “Financial conditions need to tighten. If this does not happen on its own (which seems unlikely), the Fed will have to shock markets to achieve the desired response. This would mean hiking the federal funds rate higher than currently anticipated. One way or another, to get inflation under control, the Fed will need to push bond yields higher and stock prices lower,” Dudley stated. The situation in China provides little comfort. Whereas its economy often provides a counterweight to US influences (growing fast when the US is growing slowly and vice versa), the Chinese authorities’ zero-COVID-19 policy is choking economic activity. China could already be in a recession.  Shanghai’s port activity is falling faster than in early 2020, when the COVID-19 outbreak caused the entire global economy to shut down. Chinese purchasing manager index measures have already fallen well below 50, signalling a contraction in activity levels.  In Europe, inflation has also become too uncomfortable for the European Central Bank. President Lagarde has said that quantitative easing will end in Q3, and interest rate hikes will likely commence at the ECB’s 21 July policy meeting.  However, this year, the eurozone first-quarter growth was a measly 0.2 percent over the previous quarter. The war in Ukraine has directly affected energy supplies to EU economies, forcing many to seek alternative, and costlier, sources. With recession looming, be careful not to make significant investment decisions you might later regret. Cormac Lucey is an economic commentator and lecturer at Chartered Accountants Ireland.

The crypto slump has highlighted the risks posed by cryptocurrency as a speculative asset, but for professionals in finance, the immediate challenge is working out how best to account for it. Gavin Fitzpatrick and Mike O’Halloran dig into the details. Money, currencies and the methods by which people and businesses earn, store and exchange value have taken numerous forms throughout history.  The evolution of currency dates back many millennia, from the early days of bartering to modern methods, such as coins, notes, loans, bonds and promissory notes. Introduced in 2009 with the launch of Bitcoin, cryptocurrency is the latest evolution in this process. Despite a slow initial uptake, its popularity has risen dramatically in the past decade and, today, there are thousands of different cryptocurrencies in existence.  Views on their usefulness and longevity are somewhat fragmented, however. Investors who have been fortunate enough to acquire cryptocurrency at low prices sing its praises, whereas critics argue against its fundamentals and highlight the volatility of the cryptocurrency market. For companies and the accounting profession, however, the immediate challenge is working out how these assets should be accounted for. Here are some common questions worth bearing in mind. Is there a specific standard that accountants can apply to cryptocurrencies? In short, the answer here is no—nor do cryptocurrencies fit neatly into any existing standard. Accounting for cryptocurrencies at fair value through profit and loss may seem intuitive. However, such an approach is not compatible with IFRS requirements in most circumstances, as cryptocurrencies may not meet the definition of a financial instrument as per IAS 32.  Should cryptocurrencies be treated as another form of cash? IAS 7 Statement of Cash Flows states that cash comprises cash on hand and demand deposits. IAS 32 Financial Instruments Presentation notes that currency (cash) is a financial asset because it represents the medium of exchange. While cryptocurrencies are becoming more prevalent, they cannot be readily exchanged for all goods or services.  IAS 7 also considers cash equivalents—short-term, highly liquid investments that are readily convertible to known cash amounts and subject to an insignificant risk of changes in value. Given the considerable price volatility in cryptocurrencies, entities have not sought to apply policies where they define holdings in crypto assets as cash or cash equivalents. In the absence of a specific standard, what guidance and methodologies can accountants follow when deciding how to account for these assets? In practice, accounting policies defined to deal with cryptocurrencies follow the principles of accounting for intangible assets or, in some cases, accounting for inventory.  Intangible assets IAS 38 Intangible Assets defines an intangible asset as “an identifiable non-monetary asset without physical substance”.  Identifiable – under IAS 38, an asset is identifiable if it “is capable of being separated or divided from the entity and sold, transferred, licensed, rented or exchanged.” Cryptocurrency holdings can be traded and are, therefore, identifiable. Non-monetary – IAS 38 defines monetary assets as “money held and assets to be received in fixed or determinable amounts of money.” The value of a cryptocurrency is subject to major variations arising from supply and demand. As a result, its value is not fixed or determinable. Without physical substance – as a digital currency, cryptocurrencies do not have physical substance. As a result of applying the above logic, many companies classify holdings in cryptocurrencies as intangible assets. In line with IAS 38, companies can use one of two approaches to account for intangible assets: Cost – cryptocurrency asset is carried at cost less accumulated amortisation and impairment. In applying this approach, companies must determine if the asset has a finite or indefinite useful life. Given that cryptocurrencies can act as a store of value over time, they have an indefinite useful life, meaning the asset would not be subject to an annual amortisation charge. Instead, an annual impairment review would be necessary. Revaluation – under IAS 38, intangible assets can be carried at their revalued amount as determined at the end of each reporting period. To adopt this approach, the asset must be capable of reliable measurement. While active markets are often uncommon for intangible assets, where cryptocurrencies are traded on an exchange, it may be possible to apply the revaluation model. In order to present increases and decreases correctly (i.e. determining how much is presented in other comprehensive income versus profit and loss), entities must be able to track movements in sufficient detail across their holdings. Establishing the cost of the crypto asset denominated in a foreign currency According to IAS 21 The Effects of Changes in Foreign Exchange Rates, entities will record holdings in cryptocurrencies using the spot exchange rate between functional currency and the cryptocurrency at the date of acquisition.  As noted earlier, cryptocurrencies are not considered to meet the definition of monetary items. Therefore, holdings in cryptocurrencies measured at historical cost in a foreign currency will be translated using the exchange rate at the initial transaction date. Holdings measured using the revaluation approach shall be translated using the exchange rate applied when the valuation was determined.  Inventory As demonstrated, holdings in cryptocurrencies can meet the definition of intangible assets under IAS 38. However, within the scoping section of IAS 38, it is noted that intangible assets held by an entity for sale in the ordinary course of business are outside the scope of the standard. This conclusion is drawn from the fact that such holdings should be accounted for under IAS 2 Inventories. While the default treatment, under IAS 2, is to account for inventories at the lower cost and net realisable value, the standard also states this treatment does not apply to commodity broker-traders.  Such traders are required, under IAS 2, to account for their inventory at fair value less cost to sell, with changes in value being recognised in profit and loss.  Intuitively, it may seem appropriate for entities holding cryptocurrencies to follow the same accounting applied by broker-traders under a business model that involves active buying and selling.  However, since cryptocurrencies do not have a physical form aligning their accounting to a scope exception for commodity traders, it is a judgment call.  In practice, where there is a business model under which crypto assets are acquired to sell in the short term and generate a profit from changes in price or broker margin, the treatment described here from IAS 2 for broker-dealers has been applied.  Other considerations  So far, we have explored accounting for holdings of cryptocurrencies (IAS 38) and trading in cryptocurrencies (IAS 2). The standards referenced are not new.  To date, the IASB has focused on aligning accounting for cryptocurrencies to existing guidance, and practice has developed accordingly. While there is clear logic to the policies developed from this approach, there are still challenges.  For example, while applying the cost model of IAS 38 is straightforward, the balance stated in the financials may be significantly different to the market value. On the other hand, applying the revaluation model of IAS 38 can be difficult from the point of view of tracking movements in value to determine how much is presented in profit and loss versus other comprehensive income.  What about custodians? As recently as March 2022, the US Securities and Exchange Commission (SEC) released their Staff Accounting Bulletin No. 121.  The bulletin provides guidance for reporting entities operating platforms allowing users to transact in cryptocurrencies, while also engaging in activities for which they have an obligation to safeguard customers’ crypto assets.  Until now, custodians may have concluded that they do not control the asset they safeguard. However, the SEC believes that stakeholders would benefit from the inclusion of a safeguarding liability and a related asset (similar to an indemnification asset), both measured at fair value. This guidance is applicable to reporting entities that apply US GAAP or IFRS in their SEC filings. These entities are expected to comply in their first interim or annual financial statements ending after 15 June 2022. While this requirement applies to SEC filings, it is an essential development to be aware of. Challenges ahead Accounting policies designed to deal with cryptocurrencies have developed, in practice, from existing standards. While these policies are grounded in fundamental accounting principles, there are challenges.  As cryptocurrencies continue to become more prevalent, some of the key assumptions in these policies will be challenged.  For example, if the price of cryptocurrencies becomes less volatile, this would challenge the conclusion that they meet the definition of non-monetary assets under IAS 38. Instead, with less price volatility, it could be argued that they meet the definition of cash equivalents.  Given the current challenges and ongoing development of cryptocurrencies, many are calling for standard-setters to engage in a dedicated project to address these issues.  Gavin Fitzpatrick is a Partner in Financial Accounting and Advisory Services at Grant Thornton.  Mike O’Halloran is Technical Manager in the Advocacy and Voice Department of Chartered Accountants Ireland.

Where can small businesses find the advice they need to keep growing? Trusted advisers, says Emma Jones.  My company solves problems for small businesses based on data sets and evidence that guides businesses from different localities and sectors to support that is proven to work for their peers. We shortcut a founder’s route to success through pointing them to the right intervention for their business, at the right time, boosting productivity by saving valuable hours searching for relevant advice.    One factor that has aided the move towards standardised and personalised advice is the number of businesses now operating on common platforms.  Take the e-commerce sector as an example: most online sellers use the same ‘stack’ of technologies, whether that is Big Commerce for sales, Facebook to drive advertising, or Google Analytics to measure results.  This means smart data companies can show a founder if they are selling more or less – or paying more or less for those sales – than competitors.  With insight in hand, a founder then wants advice on how to improve and get into the top tier of performers. Business owners want to simply be told ‘how’ and ‘where’ to spend their time and money. They are willing to share data on key company metrics in return for advice on how they can perform better.  This is where the role of trusted advisers comes in.  With a foundation of data, advisers can guide a business owner through a personalised support journey, with in-built accountability as the adviser takes on the role of a coach in setting out milestones for the business to deliver.  There is a key role for accountants in this as managing or raising money is integral to business progression. While we want to connect small business owners with the right support, we also want to connect them to the trusted experts who can help them to do the jobs that need to be done to spur growth.  Guiding business owners to make the right moves, based on data and insight, and connecting them to the right advisers can help to boost their efficiency, potentially delivering a similar benefit to the wider economy.  Emma Jones is Founder of Enterprise Nation.