Conal Kennedy, Head of Practice Consulting, writes: As we are going to print, both the Republic of Ireland and the UK are beginning the process of re-emergence from lockdown. The stages of the process have been published, and businesses are starting to plan for the first steps needed. The COVID-19 pandemic has struck hard at many sectors of business, north and south of the border, and Chartered Accountants in practice are in the forefront of helping business clients to plot a route through and out of the crisis. Some practitioners have found that most of their time since the lockdown in mid-March has been spent firefighting. Clients have needed their expertise in financial planning, accessing finance, restructuring businesses, and applying for state aid. Just as importantly, accountants have been a source of reassurance and trust in uncertain times. A priority for the Institute has been to put in place a range of information for accountants in practice, working with our Advocacy and Voice team to obtain clarifications and highlight inconsistencies on the government supports available. As always, we in Practice Consulting are at the end of the telephone for you and we have been in continuous contact with members since the start of the crisis. Most of the Institute’s online resources specific to the crisis are now to be found in the COVID-19 Hub. The resources range from guidance on taxation and technical issues to health and wellbeing, and most recently, sources of finance. There is a lot of information in the web pages, and more to be found in our webinars, both live and recorded. We are continuing an active programme of live webinars, many of which are free. All of these are recorded and are immediately made available in what is fast becoming an impressive array of COVID-19 related guidance. In our webinar programme, our range of speakers and experts speak with authority and candour, focused on your needs as a member. In Practice Consulting, we have run six webinars on the response of practices to the crisis and the auditing and accounting issues arising from it. The COVID-19 Hub can be found on the Institute’s website at https://www.charteredaccountants.ie/knowledge-centre/covid-19-hub. Most businesses will find a way through the crisis through a combination of perseverance, innovation, and ingenuity. However, most will need finance, and access and availability of adequate and timely finance will be crucial to the economic recovery going forward. Recognising this, we have recently introduced Government Supports pages in the Key Resources area of the COVID-19 Hub. Here, we explain the Temporary Wage Subsidy Scheme and the Corona Virus Job Retention Scheme in ROI and NI respectively. See further information regarding these in the taxation section below. We also provide a guide to the broad and growing range of capital supports available to businesses available to business in both jurisdictions. Of note are the recently introduced schemes whereby businesses can defer or warehouse tax debt, which are further discussed in the tax section. Other schemes offer working capital loans or grants. Some schemes are for industry sectors particularly hard hit by the crisis. Accountants will need to develop an expertise and a familiarity with these resources if they are to help their clients most effectively. A source of finance will effectively meet a client’s needs if the application process is not overly complex or fraught with delays, and it results in timely and targeted funding. What has been your experience of assisting your clients to accesses sources of government funding, or indeed, in accessing these on your own practice’s behalf? We need your feedback so that we can more effectively help you and, where necessary, to lobby on your behalf. Please participate in our surveys, and of course we welcome hearing from you directly. One aspect of many offers of finance is that the application process includes a request for an accountant to report on the financial affairs of the business or person. Confirmation requests often take the form of a standard form for the accountant to complete and sign. Accountants should approach such requests with caution. It may be necessary to obtain a separate engagement letter. The Institute advises members to avoid signing such forms where they incorporate a broad and open ended statement, including such matters as confirmations of the client’s ability to repay borrowings or confirming the impact of the COVID-19 crisis on the client’s business. Also avoid using language such as “we certify”, “correct”, “accurate” or “we have ensured” since it implies a level of certainty which cannot necessarily be given. See Helpsheet E19 Reporting to Third Parties in the Members in Practice area of the website at this link: https://www.charteredaccountants.ie/Members/In-Practice/Helpsheets. See also Technical Release 11/2016 Third Party Letters of Confirmation, available in Chariot, which contains a pro-forma wording for a letter to a third party in connection with a request for confirmation. And of course, sources of finance are of little use unless there are viable businesses to support. There is much that government can do to smooth the path of commerce and industry, and much that you as an adviser can do to guide and support, but the road ahead is still fraught with uncertainty. What is certain to be next for accountants is more change, further challenge, and spurs to innovation. It will be a different profession that emerges from this crisis.

Coronavirus (COVID-19) update At the time of going to print, the situation regarding the Coronavirus (COVID-19) was evolving rapidly. Members and firms that require assistance are advised to consult the Institute’s website, where a special page has been set up containing advice and contact information: https://www.charteredaccountants.ie/about-us/coronavirus-(covid-19)advice-and-information Practising Accountants are key advisers to the business community, which is struggling to respond, to this fast-changing situation. The challenge is to stay ahead of events and stay in a position to give the best advice to clients. In spite of the range of demands facing  you, you should look to your own practice first. Make a plan for your own practice and plan to change it. Run scenarios that assume a progressively more or less restrictive environment going forward. Plan for staff non-availability due to illness or quarantine. Many practitioners and their staff are working from home. You may find that your systems were not designed to cope with the strains now placed on them, but now is the time to formulate new solutions and workarounds. Concentrate on what can be done and do it. Certain tasks may be impossible right now, but development work that had been put off can now be prioritised. Auditing can prove problematic, as in practical terms, it is typically carried out at clients’ premises, but also due to the greater risks and uncertainties to be dealt with. The FRC has issued guidance on this which is on its website. You are focused on cash flow because that is what suffers first in times of uncertainty. Again, start with a plan. Bring your financial information and accounts up to date so that you know where you stand. You may be doing less chargeable work and bringing in less cash. Identify what you can change to improve your own cash flow. Identify what cost can be cut and what expenditure you can defer. Are there sources of cash that can be drawn on? Engage with your lenders.   Clients expect and demand your advice and support right now, and your relationship as trusted adviser has never been so important. Clients should rapidly take stock of their situations, make plans for how to address issues and scenarios, and concentrate on protecting cash flow. The crisis affects clients in different ways and with different levels of severity. Your expertise, experience and judgement are now invaluable to them as your clients take their unique journeys through the crisis.   We will continue to engage and communicate with members in practice, with further and more detailed advice, as the situation develops. In the meantime, remember that your Institute and the Practice Consulting Team are here to help you.

Orla Doyle outlines the job search activities that reap the biggest reward. The Pareto principle states that 80% of outcomes are borne from 20% of the causes. It is one of the cardinal philosophies in business that ultimately guides business leaders in selecting the most productive inputs to drive maximum efficiency. However, this principle can be applied in many settings, including in the job search. See how you can harness the benefits of the 80/20 rule in your job search strategy to target the right company, the right culture, the right management team, and help you get a job you love. Wasted time The job market is a fickle beast, where the amount of effort you put in doesn’t necessarily correlate with the results you get. Working smart rather than working hard is vital. For instance, many people spend a significant amount of time tweaking their CVs and cover letters. While it is important to spend time on this, people often spend too much time, with any subsequent additions unlikely to move the needle. Interestingly, the majority of job seekers choose the job site route to apply for new jobs. Don’t get me wrong; job sites such as LinkedIn and Glassdoor are great tools to use when searching for a new job. However, churning out 10-20 applications per day on one of these sites is a lot of work that won’t necessarily yield the results you want. The truth is, nobody taught us how to look for our dream job. Most people don’t have a real strategy and as a result, everyone ends up doing the same thing. There are better ways to conduct your job search. It may require stepping outside your comfort zone, but it will ultimately raise your chances of making the right next step for your career. Both approaches described above are passive. There are more downsides to this than the time spent sitting back and waiting for an answer. In many cases, applicants later find that the job isn’t what they wanted or that compensation is too low or, in the worst-case scenario, they get no response whatsoever. Over time, this leads applicants to conclude that the job market is unfavourable, and they adopt a negative mindset. If you have been cranking out a large volume of applications daily without much luck, then you need a catalyst – a change in mindset, approach or methodology that places you on the path to career success. The psychology of spending time on inefficient job search tactics When you read the above, a fair question may be: “Why do people choose to put themselves through that?” The most common answer is that it helps people feel productive. Sending out ten applications a day across four job sites may not be the optimal way to land an interview, but at the end of the day, it helps the sender feel that they have done something or that they have put adequate effort into the job search. It’s a flawed perception, but a satisfactory outcome nevertheless for most job seekers. The other reason is that most people love passing the responsibility to someone else. The thought process here may be that if they want you, they will come back to you; if you spoke with a recruiter, they will come back to you when a relevant role comes in. In a competitive and globalised job market, though, this is rare. With the advent of technology, talent is now available across borders and the labour pool is larger than ever. Hence, if candidates are not accountable for their job search, it is an uphill battle to find suitable employment as hiring managers are likely looking at a dozen profiles that are similar or even identical to yours. To achieve success, you must be willing to do what the others won’t to achieve what they can’t. Applying the 80/20 principle So, what are the things that most people don’t do? Below are three things that you can inculcate in your job search. 1. Get specific Do you know what you want to do or, are you merely seeing what you can get? After some rejection, many people throw in the towel too early and start working their way down in terms of the jobs they are willing to accept. To prevent this from happening, get specific about the type of job you want, the size and the culture of the company, and the particular industry in which you would like to work. And then, do not deviate from that. Do you know the types of companies that hire for these jobs, the exact ones for whom you would like to work? Once you have this clarity, you will automatically be inclined to work harder to source those types of jobs and apply accordingly. You will increase your chance of getting results as your whole approach – from your CV to your references – is streamlined for the position you want. This is not to say that you should be rigid in your job search and operate within this one defined box. It is merely a tip to ensure that you are not aborting the search for your dream job before the appropriate efforts have been expended. Second, get specific about the goals of the particular job search tactic you are using. If it doesn’t work, stop and try a different channel. Many people continue to do an activity without ever stopping and asking: is this working? They adopt the attitude of “try harder” rather than analysing the results of a particular method. Set yourself a goal. For example, aim to secure five interviews through a specific channel. This could be achieved by utilising three different recruiters – but if it isn’t working, stop and take a fresh approach. 2. Network Relationships go a long way in the job market. The best jobs are often snapped up before they are even advertised on a public platform because the candidate had a good relationship with the hiring manager (or at least someone that knew them). A CV is a piece of paper that outlines your experiences at a high level. But, if you can have a conversation with someone where you articulate your expertise and ambitions, they now have a ‘face to the name’ on the CV and can understand your value proposition at a more holistic level. Start by developing a networking strategy (i.e. identify who can help you get to where you want to go and go to them directly). Other people won’t even know what they are looking for, making it impossible to know whom they need to talk to, or what they need to ask. As with all things, practice makes perfect – but it all starts with the first step. 3. Show, don’t tell The next time you have an interview, add an additional dimension to your preparation. Try to understand some of the problems the company or unit you are applying to is facing, and formulate a solution. This could involve producing a one-page document at interview, which outlines what you would do in the first 30, 60 and 90 days in the job to remedy the situation. Make no mistake: this is much easier said than done. However, a lot of successful applicants employ presentation materials where they can demonstrate what they bring to the table. Words are easy to say but tough to back up. Hence, if a hiring manager can concurrently see your work along with your words, you are automatically better than almost anyone else competing with you for the same job.   Orla Doyle is Head of Marketing at Lincoln Recruitment Specialists.

Dr Annette Clancy lays the ground rules for a successful spell of remote working. The work restrictions and social distancing introduced by the Government in response to COVID-19 may prove to be a watershed moment for flexible/remote working. The immediate shut-down of many workplaces forced hundreds of companies and thousands of workers to get creative about how to work and deliver services to clients and customers while observing public health protocols. As many are finding out, however, working from home presents a whole new set of challenges. So, how can we make flexible/remote working work? Keep going to work Not everyone has a home office or even their own room. Yet, you must still go to work. First, acknowledge the change in your work situation. It is not the same as going to the office. You may, for example, have to juggle childcare so be realistic about what you can achieve given the current circumstances. Discuss this with your employer and work around it for the time being. Then go to work. This is as much psychological as it is physical. Your home is an obstacle course of exciting activities, which throw themselves into your path before a deadline looms. Laundry, dish-washing, reorganising books (by colour, author or topic?) all seem to take on an urgency previously unheard of as the clock ticks closer to the dreaded deadline. You must defend yourself against this distraction before you begin. Create a workspace at home. This could be as simple as defining part of the kitchen table as the place where you put your laptop, phone charger and papers. Keep this clear of all other personal items. When you sit down at this space, you are at work; when you leave, you are at home. Maintaining this boundary is essential, otherwise work and home will become blurred. This is important when you work from home because it’s easy for work to bleed into your personal (psychological and social) life and before you know it, you are on your computer at 11pm and again at 7.30am. Keep communication channels open People go to work for myriad reasons. Obviously, there is the work itself, but we also develop our sense of identity through work; we make friends and develop relationships (some life-long). These relationships can feel threatened when we are no longer close to our work colleagues. People who work at home (even those who are used to it) can feel isolated and lonely. If your business uses technology such as Slack, Google Hangouts or Skype, for example, these are probably your go-to communication tools. But if not, it’s crucial to build in times when you check-in with your colleagues by phone, text or WhatsApp – whatever method works for your group of colleagues. Managers who have no experience of managing teams remotely will need to take particular care to check-in with their people as it is easy to lose contact in a remote working context. Keep things normal Social distancing can quickly turn into social isolation unless we keep some semblance of normality. We may not be able to go to the pub on a Friday with friends or go out to dinner with colleagues, but we can organise ‘virtual coffee dates’ or ‘remote lunches’ using Skype, Zoom or Facetime. This means organising specific times to be together online, but away from work. Of course, it isn’t the same as being in the same room. And yes, it’s a bit ‘weird’. But the main point here is to maintain social contact to ensure that workers do not succumb to loneliness, and for managers to engage in non-work conversation with their colleagues. Once you crack it, we may look back on this time as the research and development phase of a new way of working. Dr Annette Clancy is Assistant Professor at UCD School of Art, History and Cultural Policy.

Six influential Chartered Accountants in business and politics share their stories. Chartered Accountants are in many ways a driving force in the economy. With more than 16,000 members working in industry, and many in C-suite roles, our colleagues are found in every sector and at every level. In the pages that follow, we meet a number of trailblazing Chartered Accountants at various stages in their career. Each has had a significant influence on Ireland Inc. and continues to exemplify the very best aspects of the profession. From Sharon Cunningham, Co-Founder of Shorla Pharma to Michael Cawley, former Deputy Chief Executive at Ryanair, these profiles offer a snapshot of the talent and influence within the membership – qualities that will be in high demand in these uncertain times. Senan Murphy The CRH Group Finance Director discusses his journey from technical subject matter expert to general manager and leader. CRH Group Finance Director, Senan Murphy, divides his career into five chapters, beginning with his education and training as a Chartered Accountant and culminating in his current role. “I was interested in maths, business and science in school and did a BComm in UCD,” he recalls. “You could take a number of routes after that, but Chartered Accountancy looked the most interesting to me. I did a Diploma in Professional Accounting, which took the first three years out of the accounting exams at the time.” Senan joined Arthur Andersen in 1990 when it was one of the so-called Big 8. “I stayed there for five years and it was a very good place to work. It was a great transition from college into the real world. I moved into industry in 1995.” That saw him move to GE and begin chapter two. “Practice is a great experience, but you are an adviser. I wanted to be part of the execution and implementation; not just give advice and come back the following year to see how it worked out.” His GE career took in finance, acquisitions and business development in Europe and then the US, before moving back to Europe to what became GE Money. But the call of home was loud, and he moved back to Ireland with his wife and children in 2003 to begin the next chapter with Eddie O’Connor in Airtricity. “I stayed and helped grow the business until it was sold to SSE in 2008,” he said. That saw the beginning of chapter four with Senan moving into banking, first with RBS Ulster Bank and then Bank of Ireland. “2008 was an interesting time for the sector,” he noted with at least a hint of humour. “When something is in a crisis, you learn more than when things are going smoothly. It was a tough time for the banking industry but an interesting time to be part of it.” He sees the transition from subject matter expert to general management as quite natural for a Chartered Accountant. “The move from accountancy to financial leader to general management happens naturally. You start off learning about the financial side, but most of the job is about managing people. It’s about collaborating, working in teams and leading teams. As a financial manager, you get more and more involved in the commercial and operational sides of the business. In Airtricity, I became more and more involved in growing the business. “In some ways, it’s good to leave the numbers behind,” he continues. “As you go on, it’s about building good teams around you. The expertise around you comes from them. You become an orchestrator in a way. Accountants all start off the same way, and a lot of Chartered Accountants own their own business or end up running businesses. We don’t all stay in the financial world.” His fifth chapter sees him back in the role of Group Finance Director with CRH. “It’s a large organisation with lots of operating companies around the world. My job is to help drive performance and improve the business, but I also help to recruit, develop and promote talent globally. I also spend a fair amount of time talking to the owners of businesses. We have lots of shareholders around the world who want to hear from us.” For Senan, the people agenda is the most enjoyable. “That’s the part I enjoy most. I’m always pleasantly surprised by the people coming through the system who are more capable than their years might suggest. I also enjoy meeting shareholders. Some are supportive; some are quite challenging. Those two parts are very enjoyable.” He believes Chartered Accountancy has provided a good grounding for his career. “When you come out of college, you have to decide if you want to go into a business or go into practice and train as an accountant there. Practice is a good place to start with people of a similar age. You have to be a team player and learn to work with others. You have a number of clients and you have to build relationships with them. You’re not quite in a sales role, but you are really.” Michael Cawley Michael Cawley recalls his unorthodox path to Chartered Accountancy and life as the second in command at one of the world’s most successful airlines. With the candour we’ve come to expect from people associated with Ryanair, Michael Cawley says his reasons for becoming a Chartered Accountant were mostly materialistic. “My sister had a few boyfriends who were accountants and they had cars,” he says. “That was quite impressive, and it stuck out as most people didn’t have cars at that time.” Having never studied accountancy in school, Michael chose to pursue a commerce degree in UCC. “I liked it, and I went to Coopers & Lybrand afterwards. I spent three years auditing, and I hated it with a passion! The moment I qualified and finished my training contract, I walked out the door.” After a year teaching in UCC, he went into industry with the Cork-based motor dealer, Frank Boland. “I wanted to be in the middle of the action rather than just recording what had happened. I worked there until 1981 when I moved to Dublin to work for Kodak for five years.” His next move was to Athlone Extrusions as Managing Director. He led a management buy-out (MBO) of the company in 1990, the biggest such transaction in Irish corporate history at the time. The company later went on to a public flotation. After that, he moved back to the motor industry with Gowan Group in 1993. “I enjoyed my time there, but it was a family-owned company, so there was no prospect of a stake in the business,” he says. His move to Ryanair in 1997 as CFO and later, Deputy Chief Executive and Chief Operating Officer had its roots in the Athlone Extrusions MBO. “I worked on it with Gerry McEvoy in KPMG and Tony Ryan was one of his clients. I stayed in contact with him and he knew I had ambitions beyond the Gowan Group. I was 42 or 43 at the time and I wanted to really have a good lash at something. Ryanair was about to float at the time.” That connection led him to join the airline at a crucial stage in its history. “Incredible as it may sound, I got on with Michael O’Leary from day one. I had a good few rows with him over the years as well, of course. It was always exciting, sometimes frustrating, but I was extremely lucky to be involved. It suited me from the outset.” He describes it as a phenomenal opportunity. “Low fares were in their infancy back then. We transformed air travel across Europe. I have dealt with more than 300 airports across Europe; lots of them were a bit like Knock back then, small with a few connections. We breathed life into many communities and helped them build up tourism industries. Bergamo in Italy had 130,000 passengers when we started there; that increased to 13 million by 2014. Charleroi grew from 30,000 to 7.5 million.” He stepped down from his executive role with Ryanair in 2014. He took up several non-executive directorships with a wide range of organisations including the Gowan Group, Kingspan plc, Fáilte Ireland and, of course, Ryanair. “I was 60 and grandchildren had started to come along,” he explains. “When I joined, we had 3.5 million passengers, and when I left, we had reached 83 million. It was 142 million last year. I’m delighted to still be on the board. I’m in and out every five or six weeks to catch up, so I haven’t really left. I’ve also been lucky enough to have become involved in a number of very fine businesses.” Michael concludes by   emphasising the need to keep pace with change. “You have to be open to change. Despite the advent of artificial intelligence and so on, accountants will still be able to master their environment. But we have to stay up-to-speed and be flexible and humble about the need to change. You can be top of the pyramid today, and irrelevant in six months’ time.” Ronan Dunne Ronan Dunne, the self-declared “accidental accountant”, has taken opportunities as they arose – and to great effect. A stellar career that has seen Ronan Dunne become Executive Vice President and CEO of Verizon Consumer Group, the largest division of the world’s biggest telecoms company, could have been very different if not for a teachers’ strike back in 1981. “I was all set to do Law in UCD, but there was an examiners’ strike the year I did the Leaving Cert,” he says. “The papers couldn’t be marked and there were no college offers.” And then fate took a hand in the form of intervention by Terry O’Rourke, Managing Partner of Touche Ross, and a past pupil of his school. “He contacted the Dean and said if anyone was interested, they had three to four unfilled slots for trainee accountants. I was one of those kids who was always fascinated by finance. My dad worked for Shell in a finance role and I was always interested in it.” A phone call from the Dean and a chat with O’Rourke sealed the deal. “It sounded like an interesting opportunity, so I decided to give it a go. I am an accidental accountant.” Six years later, the newly qualified Chartered Accountant was about to experience his next encounter with fate. An injury in his final year at school had put paid to a promising rugby career, but he was also an excellent soccer player and went on to play at senior level for the Mount Merrion club in south Dublin. “We were playing in a soccer tournament in Wales, and I visited my brother in London as part of the trip. I was sitting in his apartment when my mother rang, saying a lady had called about a job interview. The job was in London so I borrowed a suit and tie from my brother, went for the interview that afternoon with BNP and by 4.30pm had a job offer. It was 1987 and the markets were on fire. They couldn’t recruit fast enough. I signed a contract, went back home and packed my bags, and returned to London three weeks later.” Rapid promotion followed, and by the age of 25 Ronan had become the chief accountant at the bank. He then switched to the banking side of the operation where he dealt mainly with major US corporates with operations in Europe. And then came a call to jump the fence. That saw him switch to senior finance and treasury roles, first with Waste Management International and then with transport and logistics group, Exel. Dunne’s next move saw him follow his former boss at Exel into BT Mobile, which was about to become O2 and de-merge from its parent. “In 2005, O2 was acquired by Telefónica and I became CEO of Telefónica UK in 2007,” he says. “That was an interesting back story. When I became CFO in 2004, my boss gave me responsibility for legal and regulation, then procurement, and then asked me to take on HR as well. After a while, I pointed out that I was doing all the heavy lifting and doing three jobs instead of one. He said I had missed the point. I clearly had the capability to be a general manager, and he was getting me ready to be a success in such a role. I still thought my future was as a big public company CFO. My boss and my chairman saw my potential before I did.” Dunne’s departure to Verizon followed a blocked sale of the business to Hutchinson in 2015. “I had decided to leave once the deal was closed. I had a fairly extensive non-compete agreement, so I had to move sector or move geography. Verizon is the largest telecoms company in the world and when I got that approach, there was no way I would turn it down. In late 2016, we headed off to New Jersey.” “My training as a Chartered Accountant has been incredibly valuable at every stage in my career,” he adds. “It really is best-in-class, and I don’t think there is a better skillset out there. In my opinion, a good Chartered Accountant is better than any MBA from any business school in the world. It’s the best business qualification out there.” And he has some advice for his fellow accountants. “The biggest challenge and opportunity for accountants is to realise that your success is measured not by what you do, but by what you can make happen and the influence you have on people. Building teams, coaching and developing them, and bringing them on a journey with you is what’s most important.” Sharon Cunningham Ambition and tenacity helped Sharon Cunningham forge a path from practice to the cutting edge of pharmaceutical innovation and entrepreneurship.   Award-winning entrepreneur, Sharon Cunningham, learned about business and accounts literally at the kitchen table. The Shorla Pharma founder was interested in business from a very early age. “Both of my parents owned companies, and it was ingrained in us from a very young age. They did the books on the kitchen table. I used to go to the accountants with my mother and was fascinated by the questions the accountant would ask. My mother was focused on things like sales and cash and had her own goals. The accountant was asking about things like profit margins, inventory management and so on.” That early inspiration led her to a degree in finance in UCC. “I wasn’t 100% sure what I was going to do when I went to college at first, but by the time I finished I knew I wanted to be a Chartered Accountant and wanted to get a training contract, preferably with one of the Big 4.” Sharon went to work with PwC in Waterford initially but soon found herself travelling to Dublin, Chicago, New York and London. “It was fun but difficult; it was lots of hard work, but it was great. I went on an international secondment to an investment fund in Manhattan. That was a great experience.” Her move to industry came about almost by chance. “At the height of the recession in December 2010, I was working on a very challenging audit. A colleague of mine got wind of a job going in a pharmaceutical company I had never heard of in Waterford. I met with the co-founders of EirGen, Tom Brennan and Patsy Carney. They are very inspirational people, and I joined the company.” Having spent seven years with the company, initially as a management accountant and later as Head of Finance, Sharon decided that it was time to start her own venture with her colleague, Orlaith Ryan. “EirGen was sold to a multinational in 2015 for $135 million in a very successful exit,” she explains. “After the takeover, the company started to change and was no longer the entrepreneurial organisation that we knew and loved. The excitement wasn’t there anymore, and both of us knew it was time to move on.” Their idea was to establish a speciality pharmaceutical company based in Clonmel, which would develop a pipeline of innovative oncology drugs for women’s and children’s cancers. “We spent two years planning Shorla at night and in our spare time, and we launched the company in January 2018,” says Cunningham. “Both of us would say that at no point were we scared. We believed in ourselves and our vision for what we wanted to do; we never thought it would fail.” That confidence was well-founded. “We don’t have billions of dollars and 20 years to wait like major pharmaceutical corporations. We are not a major corporation, nor are we a generics company. We are somewhere in between. We take existing active substances and do something novel with them. We put them to different uses and make them less toxic to the patient. The time to market is much quicker. Business is great and we are very busy. We are in the middle of multi-million euro ‘Series A’ funding round and we are growing and scaling up for the US market launch of our first product, a breast and ovarian cancer drug.” It is a bit unusual for a Chartered Accountant to set up a pharmaceutical company, she concedes. “But accountancy is a very useful skill to have in any industry. The Chartered Accountant qualification gives you a certain degree of confidence when you talk about numbers; people listen to you and don’t tend to probe too much. They accept and trust what you say. The profession as a whole has a very positive impact on society.” Sharon’s experience has taught her the value of planning. “It’s much more beneficial to work smarter, not harder,” she says. “Everyone should sit down and decide what they want to do and what they want to be, and then map out a way to get there. Don’t get bogged down in small details; don’t sweat the small stuff.” Michael McGrath Having moved from practice to politics via industry, Michael McGrath has brought his training and experience to bear in his role as Fianna Fáil’s finance spokesperson. One of the most prominent faces in politics in recent years has been that of Fianna Fáil finance spokesperson, Michael McGrath. The Cork South Central deputy has earned plaudits for his work on tracker mortgages and the regulation of so-called vulture funds, among other pressing issues. And he attributes at least part of that success to his training as a Chartered Accountant. “There is no doubt about it, the training I received as a Chartered Accountant has proven to be far more valuable than I ever thought it would,” he says. “It equipped me with the skills to get to grips with the finance portfolio. It also makes you comfortable with numbers and reaching informed decisions. The analytical skills you acquire are hugely valuable when it comes to problem-solving.” He started out on his professional and political journeys at a very young age. “I was the first member of my family to go to college when I went to study Commerce in UCC having just turned 17,” he recalls. “My first election was a contested role in the Commerce and Economics Society, and I won.” Having completed his degree in 1997, he joined KPMG in Cork. “I wanted to stay in Cork and was keen to get a professional qualification. I stayed for four years and was fortunate to work with a number of companies and organisations in a variety of sectors.” Then came the move into industry. “Following the end of the training contract, an excellent opportunity came up to join Red FM, a new start-up commercial radio station in Cork. I joined as Financial Controller in late 2001. The station had yet to go on air, and I was involved in helping set up the processes and systems to run it. It was great working for a station with a youth focus. I was reporting to the CEO and the board, and I enjoyed the diverse range of responsibilities. It was very nice having a company car as a 25-year-old, of course. I didn’t think things could get much better.” He left Red FM for a relatively short stint in the UCC finance function. “It was quite a senior role and a step up for me,” he notes. But the call of politics was loud. “I always had an interest in politics in parallel with my working life,” he explains. “I was fortunate to live in a town that still had a town council. That provided a fantastic platform for a young person to contest an election. A few hundred votes was all you needed to get elected. I ran in 1999 at the age of 22 and managed to get elected. My heart was set on politics after that.” Michael was elected to Cork County Council in 2004 and quickly realised he couldn’t continue working full-time. “I resigned from UCC in 2005 and found some part-time work to tide me through the next year and a half.” Election to the Dáil in 2007 followed. Re-election in 2011 was an altogether more difficult proposition, however. “It was an incredibly tough election. Fianna Fáil lost over 50 seats. At a time when the party vote collapsed, I managed to take the fifth and final seat. I focused on playing my part in rebuilding the party after that. Brian Lenihan passed away in June 2011, and I was appointed spokesperson on finance.” He enjoys his role as a public representative. “It is an enormous privilege to be a member of Dáil Éireann, and I still pinch myself walking in as a member. As a T.D., I am juggling a number of responsibilities. I have the finance portfolio and at a local level, I try to serve people to the best of my ability. What I get most out of it is being able to help people. Very often, people come in with difficult and sensitive issues. Sometimes they need guidance; sometimes they need someone to fight their corner.” Serving in government remains an ambition, of course. “Having spent nine years as finance spokesperson and four years involved in confidence and supply, to present a budget as Minister for Finance would naturally be an ambition,” he says. Fergal O’Dwyer Fergal O’Dwyer is one of the driving forces that helped turn DCC into the industrial powerhouse it is today. DCC is one of those quiet Irish success stories. Since its flotation in 1994, it has grown into a significant force in the energy, electronics and healthcare sectors with a substantial presence in 17 countries. From an investor perspective, the company delivered returns of nearly 7,000% up to the beginning of 2020. One constant throughout that success has been Chief Financial Officer, Fergal O’Dwyer, who joined the company in 1989 when it was still a venture capital firm. “Shortly after I joined, the company decided to change its colours and become an industrial group,” he recalls. “That required a complete transformation. We had a number of minority investments and had to decide which ones fitted in with the new strategy and which did not. Between 1990 and 1994, we spent our time moving out of some of them and moving to ownership positions in the others. I am not aware of other companies that made that strategic change.” He began his accountancy career with Craig Gardner (now PwC) almost straight out of school due to a natural aptitude. “I did maths and accountancy subjects at school and was always going to head towards finance or accountancy. I didn’t have a burning desire to be an accountant or anything, I sort of gravitated towards it.” O’Dwyer qualified as a Chartered Accountant at the age of 21 with a year or so of his training contract remaining. Ireland was in the depths of a recession at the time, and the search for opportunities took him overseas. His search took him and his wife to South Africa. “After we got married in 1983, we headed off to South Africa. I worked for three years there for Thomson McLintock, which represented KPMG at the time, and came back to PwC in 1986.” That move back led him indirectly to DCC. “I had clients who were looking for development capital, and I had worked on a number of deals on their behalf with DCC and they had worked out well for everyone. In 1989, I got a call from the founder and former CEO of DCC, Jim Flavin, who asked me to join the firm.” That was a major change. “I became an associate director of a venture capital company. I was dealing with entrepreneurs and building relationships with them. I learned about the venture capital focus on return on capital employed. That’s still the same mantra in DCC to this day. What is the return we are going to get on every euro? We aim to get a circa 15% return because we want returns well in excess of the cost of capital.” He describes the transformation from venture capitalist to industrial group as “very exciting”, but the flotation in 1994 was not without its challenges. “The flotation was a success, but we didn’t raise any capital, and our share price didn’t perform for quite a long time. We wore out a lot of shoe leather explaining our business and strategy. It has been all about constant delivery over the years, getting investors to listen and building a following. We were growing revenue, growing profits, growing cash flow, but still were having to work hard to sell the story. It was frustrating, but we had to accept that the market is always right.” His advice to other Chartered Accountants starting out on their careers is to keep learning. “The qualification equips you to do much more than just the numbers. You’ve got to interpret and advise on them. I still learn every day and you have to try to learn all the time. And you’ve got to learn from your mistakes. You can find business to be stressful, but if you put in the work and effort, it can be rewarding and fulfilling.”

Kim Doyle considers the best course of action for businesses that are strained financially as a result of the impact of COVID-19. COVID-19, a term that was not part of most members’ vocabulary a mere two months ago, is now the unwanted commandeer of conversations. Self-isolation, social distancing, WFH (working from home) and CC (conference call) have become part of our basic business language. But we must not forget to keep talking about the old reliable, tax. Continue to talk to Revenue, as early as possible, if you are now experiencing timely tax payment difficulties. This is one of their key messages. The other is to get tax returns in on time. At the time of writing, Revenue’s message to businesses strained financially as a result of the impact of COVID-19 is that they will work to resolve tax payment difficulties. Viable businesses that experience cash flow difficulties have long been encouraged by Revenue to engage with them as early as possible. Often, entering a phased payment arrangement is the appropriate practical step to deal with outstanding tax payments. In fact, at the end of 2019, over 6,300 business had such arrangements in place covering €73 million in tax debt, according to Revenue. Revenue will only agree to a phased payment arrangement provided the relevant tax returns are filed with them, the tax due is fully calculated, the business is viable and there is early and honest engagement. Applications for such an arrangement can be made via the Revenue Online Service (ROS). Supporting documents will be required; the volume of documentation depends on the level of outstanding tax payments. A down-payment must be made, which can range from 25-40% of the total tax payment, which may include interest. Agents can apply on behalf of their clients via ROS. Applications are typically responded to within two weeks; in many cases, arrangements are up and running in a matter of days. Responding to the difficulties arising from the impacts of COVID-19, Revenue has implemented specific measures for small- and medium-sized enterprises (SMEs) experiencing trading difficulties. Perhaps the most important being that interest will not be applied to late tax payments of VAT for the January/February period (due by 23 March) or employer PAYE liabilities for the months of February and March. Any future similar suspension will be considered at the relevant time, Revenue say. For other businesses experiencing temporary cash flow or trading difficulties, the advice from Revenue is to contact the Collector-General’s office directly or the appropriate Revenue division. Revenue has also suspended all debt enforcement activity, for now. Current tax clearance status is expected to remain in place for all businesses over the coming months.  And in an effort to ease the burden on households, Revenue also announced the deferral of certain local tax payments (annual Debit Instruction/Single Debit Authority) to 21 May from 21 March. As of now, there is no statement from Revenue on dealing with other taxes such as corporation tax. In this unprecedented turbulent environment, protecting the tax receipts must be one of the priorities for Government. It is hoped that any dip in tax receipts will be confined to 2020. However, as long as we continue to talk about COVID-19 and suffer the impacts, we must also continue to talk to Revenue. Kim Doyle FCA, AITI-CTA, is Tax Manager at Chartered Accountants Ireland.

It is now time to consider the UK tax relief available on building projects, writes Eugene Moore. To stimulate international investment in the UK, the then-Chancellor, Phillip Hammond, presented his 2018 Autumn Budget to the House of Commons. In it, he announced the introduction of capital allowances for capital expenditure incurred on the construction, renovation or conversion of most UK and overseas buildings and structures. The Structures and Building Allowance (SBA) applies to contracts entered into on or after 29 October 2018. Construction projects that may qualify for the SBA are now starting to be completed, with the structures and buildings coming into use. It is now, therefore, time for the current owners and their advisors to consider the significant tax relief available on such capital projects and how best to mitigate the risks of making an invalid claim. The relief Relief is available for UK and overseas structures and buildings where the claiming business is within the charge to UK tax. The SBA was introduced at a rate of 2% straight-line basis on qualifying expenditure over 50 years. The rate was increased to 3% in the Budget and the change will take effect from 1 April 2020 for UK corporation tax and 6 April 2020 for UK income tax. The relief commences with the later of: The day the building or structure is first brought into non-residential use; or The day the qualifying expenditure is incurred. Once qualifying expenditure is incurred, the first use of the structure or building must be non-residential. Subsequent events, such as change of use to residential or the demolition of the structure or building, will impact the availability of the SBA. A period of non-use immediately after a period of non-residential use is deemed as non-residential use, and the SBA continues to be available. Qualifying activities The structure or building must be for a qualifying activity carried out by the person who holds the relevant interest. Qualifying activities include: trade; an ordinary UK property business; an ordinary overseas property business; a profession or vocation; the carrying on of a concern listed in ITTOIA05/S12(4) or CTA09/S39(4) (mines, quarries and other concerns); or managing the investments of a company with investment business. Qualifying expenditure Capital expenditure incurred on the construction or purchase of a structure or building (including professional fees and site preparation costs) is qualifying expenditure. Excluded expenditure covers: the cost of the land or rights over the land; the cost of obtaining planning permission; financing costs; or the cost of land remediation, drainage and reclamation. Abortive costs, such as architect’s fees associated with a structure or building that is not completed, do not qualify for the SBA. Commencement date As the SBA was introduced to stimulate investment from 29 October 2018, allowances are not available on structures or buildings where the contract for the physical construction work was entered into before 29 October 2018. For projects under a construction contract, the commencement date for the SBA will be the date of that contract. HMRC is of the opinion that contracts can take different forms; it gives the example of email exchanges, which confirm that works will take place. Where no contract is in place, the date of the commencement of physical works represents the commencement date for the SBA. This is also the case where physical works commence, and a contract is subsequently put in place. Site preparation According to HMRC, the cost incurred in preparing land as a site is treated as expenditure on the construction of the structure or building that is then built upon that site. This includes cutting, tunnelling or levelling land. On the plus side, these costs are not excluded as expenditure for the SBA. On the downside, the timing of these costs could drag the entire construction project into an invalid claim position for the SBA if they are incurred before 29 October 2018. HMRC states that the following does not impact the commencement date: separate preparation and construction contracts; replacement of preparation contracts; preparation works ceased then recommenced; and preparation work redone. Demolition or enabling works incurred before 29 October 2018 do not in themselves make the entire claim invalid for the SBA unless explicitly linked to the actual structure or building. Practical issues Before an SBA claim can be made on a UK income tax or UK corporation tax return, the current owner of the relevant interest in a structure or building must create and maintain an allowance statement. Where the current owner incurred the qualifying expenditure in relation to the structure or building, the current owner creates the allowance statement. Where the current owner acquired the relevant interest in the structure or building from another person, they must obtain the allowance statement from the previous owner. An allowance statement means a written statement, which must include the following information: information to identify the building to which it relates; the date of the earliest written contract for the construction of the building; the amount of qualifying expenditure incurred on its construction or purchase; and the date the building is first brought into non-residential use. CPSE.1 (Ver. 3.8) General Pre-Contacts Enquiries for all Commercial Property Transactions now contains questions concerning the SBA and requests explicitly the allowance statement. In summary The SBA may result in significant tax relief for UK businesses that construct or purchase non-residential structures and buildings where previously, there was none on such expenditure. Careful consideration should be given to the commencement date of the project, and detailed evidence must be created and maintained by way of an allowance statement to avoid invalid claims.   Eugene Moore ACA is Corporate Tax Manager at BDO Northern Ireland.

David Duffy discusses recent Irish, EU and UK VAT developments. Irish VAT updates VAT compensation scheme for charities eBrief 21/20 contains updated guidance in respect of the VAT compensation scheme for charities. This scheme is now open in respect of VAT incurred by charities in 2019. The deadline for submitting such claims is 30 June 2020. Charities must satisfy various conditions to make a valid claim and there is a formula for calculating the claim. The total fund available for all claims is capped at €5 million and, if exceeded, this amount will be allocated between valid claims on a pro rata basis. There have been no changes to the scheme, but the guidance provides further details on the terms “total income” and “qualifying income”, which are relevant to the calculation of claims under the scheme. VAT on telecom services On 31 January 2020, the Tax Appeals Commission (TAC) published a determination in a case (16TACD2020) involving a mobile telephone operator (the appellant). The case considered the VAT treatment of the appellant’s cancellation charges, unused data, and non-EU roaming on bill-pay mobile phone services, as well as the time limit for making VAT reclaims. The appellant was unsuccessful in arguing for a VAT refund on three counts but did succeed in a claim for a VAT refund on non-EU roaming services. The key points of TAC’s determination were as follows: The appellant was liable for VAT on cancellation charges to bill-pay customers for early termination of their contracts. This followed a similar decision by the Court of Justice of the EU (CJEU) in MEO (C-295/17). The appellant was also liable for VAT in respect of customers’ unused data included in the price of their bundle. The appellant’s argument that VAT refunds should extend back further than four years was also rejected. The appellant had sought to argue that it should be equivalent to the five-year refund period available for other taxes, but this was rejected. The appellant was successful in arguing for a VAT refund to the extent that its bill-pay customers used its telecom services outside the EU. Revenue had sought to argue that refunds for non-EU roaming should only be available for pre-pay customers, but this was rejected by the TAC. While the case is principally relevant to the telecoms sector, some of the principles regarding cancellation charges and equal treatment could have wider application. The determination (which is available on the TAC’s website) is, therefore, a useful read. Time limits The question of time limits for VAT refunds was also the subject of a TAC determination (03TACD2020). The taxpayer was engaged in a VAT-exempt business but was entitled to partial VAT recovery on its dual-use input costs to the extent that its services were to non-EU recipients. However, during 2009, the taxpayer had not been aware of its entitlement to partial VAT recovery and therefore had not taken any VAT recovery on its costs. Upon becoming aware of this entitlement, the taxpayer submitted a claim on 31 December 2013, which included VAT incurred before 1 November 2009, which would ordinarily be outside the four-year time limit. The taxpayer sought to argue that this VAT was still within the four-year time limit because, in the taxpayer’s view, it was an adjustment of its partial exemption VAT recovery rate review for 2009 (which fell due after 31 December 2009). However, the TAC disagreed as the taxpayer had not applied any VAT recovery rate to dual-use inputs during 2009. The TAC concluded that only VAT incurred from 1 November 2009 onwards was correctly included in the claim submitted on 31 December 2013. While the facts of the case are quite specific, it emphasises the importance of following the appropriate procedures and paying close attention to time limits when submitting a claim for any historic VAT. EU VAT updates VAT treatment of boat moorings Segler (C-715/18) was a German non-profit-making association whose objective was to promote sailing and motorised water sports. It maintained boat moorings, some of which were used by members of the association and others were used by guests. Segler applied the reduced rate of German VAT as it believed the letting of the moorings fell within the meaning of “accommodation provided in hotels and similar establishments, including the provision of holiday accommodation and the letting of places on camping or caravan sites”. The German tax authorities argued that the standard rate of VAT should instead apply. The CJEU concluded that the reduced rate could not apply, as the letting of the boat mooring was not intrinsically linked to the concept of “accommodation”. UK VAT updates Budget 2020 The UK’s Chancellor of the Exchequer announced several VAT measures in Budget 2020, which was presented to the UK parliament on 11 March 2020. The key updates are summarised below: The 0% rate of VAT will apply to e-books and online newspapers, magazines and journals with effect from 1 December 2020, bringing them in line with the rate applying in the UK to physical books and publications. The standard 20% rate has applied heretofore. Interestingly, however, the UK Upper Tribunal had already held that the 0% rate correctly applied to such publications in the Newscorp decision, but HMRC has indicated an intention to appeal that decision. Consequently, the position applying before 1 December 2020 remains to be clarified. As a cash flow-relieving measure following the implementation of Brexit, postponed accounting for import VAT will be introduced for all goods imported into the UK with effect from 1 January 2021. Postponed VAT accounting will enable UK VAT-registered businesses to self-account for import VAT under the reverse charge mechanism. From January 2021, 0% VAT will apply to women’s sanitary products. David Duffy FCA, AITI Chartered Tax Advisor, is Indirect Tax Partner at KPMG.

Some of the commercial habits that are already being formed could serve us well once the COVID-19 crisis is over, writes Dr Brian Keegan.  By now, all businesses and institutions have taken some preventative and containment measures against COVID-19 for their staff, but the early adopters of social distancing won headlines and even kudos for so doing. They were the first to tell personnel to work from home, to block staff from hosting or attending large meetings or any type of gathering, and to have placed an embargo on international travel. Those early adopters had much in common. Typically they were large, multinational, and flourished in the online sales and services environment. By contrast, the indigenous SME sector often operates within a market segment where having people work from home is not practicable. The sector is now suffering the most from the collapse in demand caused by the pandemic. We have seen epidemics before, but how well did we remember the lessons of Zika virus a few years on? Or SARS? Or swine flu? How much better are we at defending ourselves? At the time, these were serious crises, but they seem to have faded from the collective memory very quickly. That may be simply because their social and economic impact was far less pronounced than that of the current scourge, but I’m not sure the reason is as straightforward as that. It may instead be because they left no lasting behavioural changes in most of the businesses and societies they affected. Societies that did remember how bad things could get were better prepared for COVID-19. Singapore is not the most open of jurisdictions, but they read the warning signs early. Also the isolation wards built there to tackle SARS in the early years of the century were still available to hold patients ill with COVID-19, and that in turn allowed the authorities to be more prescriptive about quarantining and testing. No business, nor even a country, can (or even should) sustain the kind of “just in case” procedures, buffers and Singaporean-style infrastructure to guard against once-in-a-century pandemics. This, however, is a crisis for all of us, and we should not waste an opportunity to take some insight from it. Some of the commercial habits that are already being formed could serve us well once this crisis is over. Because the situation is changing daily, I am hesitant to be too prescriptive and not all these behaviours will sustain or improve the bottom line. Nevertheless, there is already evidence that businesses are accommodating, and staff are delivering through, more flexible working practices. This is not just about working from home where that is possible, but about varied working hours, role definition and service delivery methods. In days when demand is in decline almost everywhere, the Institute sees an upswing in demand from members for resource materials and online training. This could be down to a desire to fill empty hours, or more positively, it could be down to a broader recognition that additional skills and tools are needed for future survival. Behaviour is the hardest thing to change. The reluctance to lend or borrow, an antipathy towards speculative development, overcautious economic policy and even the rise of the gig economy can be traced back to the downturn a decade ago. The legacy of the 2007/08 recession sometimes lingers less on balance sheets than it does in the collective memory. The businesses that bounce back the fastest could well be those who are the early adopters of the new business behaviours prompted by the crisis. Just like the last recession, COVID-19 is now creating memories of its own. We will need to hang on to the positive ones. Dr Brian Keegan is Director, Advocacy & Voice, at Chartered Accountants Ireland.

Recent proposals from the International Accounting Standards Board could have dramatic effects on how companies present their financial performance. By Terry O’Rourke and Barbara McCormack When Gary Kabureck, a board member of the International Accounting Standards Board (IASB), presented an update on IFRS developments in Chartered Accountants House last October, he alerted us to the impending proposals from the IASB on how companies’ financial performance should be presented in the profit and loss account (or to use the IFRS term, the ‘statement of profit or loss’). Sure enough, just before Christmas, the IASB issued a 200-page Exposure Draft proposing substantial changes in response to demands from users for better information on financial performance, which would reduce the diversity of presentation and enhance comparability between companies. At a high level, the profit and loss account would be required to classify income and expenses into the following categories: operating, investing, financing, associates and joint ventures, income tax, and discontinued operations. However, the level of prescription and definition underpinning the presentation of income and expenses in these categories is quite detailed and could cause significant changes in how companies present their results. Operating profit A key proposal is that the operating category, which is intended to include all income and expenses from the main business activities, would be the default category, to include all income and expenses that are not defined in one of the other categories. This would include items such as restructuring costs and goodwill impairments, irrespective of whether they are regarded by management as once-off or exceptional. The resultant operating profit or loss would be presented on the face of the profit and loss account. While many companies currently choose to present operating profit, its composition may well be different under these proposals. For example, associates and joint ventures would be split into those that are integral to the entity’s operations and those that are not. The results from those that are integral would be presented as a separate line item after operating profit while those that are not integral would be included in the investing category. The investing category would also include returns, and related expense, from other investments that are generated individually and largely independently of the entity’s other resources. Prohibiting the use of columns Many Irish and UK companies make use of columns on the face of the profit and loss account to present adjusted profit measures such as operating profit before exceptional restructuring or impairment expense. The proposals in the Exposure Draft include a prohibition on the use of columns to present management performance measures in the profit and loss account. The proposed definition of management performance measures would likely include such adjusted profit measures and they would therefore be prohibited from being presented in columnar format on the face of the profit and loss account. The Exposure Draft notes that “a few entities use a columnar approach” to present management performance measures based on a sample of 100 large companies from around the world. However, had the sample been taken from Ireland and the UK, it may well have shown a much greater incidence of columnar reporting. The IASB notes that the prohibition would be a change for some companies “operating in jurisdictions where the use of columns is common”. It will be interesting to see if stakeholders request further clarity from the IASB on what, if any, types of measures can be included in columnar format in the profit and loss account. Figure 1 shows what an extract from the face of a profit and loss account using columns to strip out exceptional items might look like, while Figure 2 shows the numbers without columns. There will undoubtedly be companies who consider that the columnar format in Figure 1 provides more useful information about their performance, particularly in relation to the year-on-year comparison. It is notable that if the Brexit transition period ends on 31 December 2020, it will be for a newly established UK IFRS Endorsement Board to decide whether to adopt new IFRS standards in the UK having consulted with UK stakeholders. Consequently, if the IASB proceeds to include its current proposals in the final IFRS and the EU adopts that Standard, perhaps during 2021, there is no guarantee that UK listed companies will have to comply with all the requirements of the eventual IFRS Standard. The Exposure Draft proposes that, where a company uses management performance measures to communicate with users, those measures should be included in a note to the financial statements with a reconciliation to the most directly comparable IFRS number, and other information including an explanation as to why those measures are useful. Because EBITDA is a commonly used measure in communications with users, the IASB considered defining EBITDA. But it is instead proposing that operating profit or loss before depreciation and amortisation would be specified as not being a management performance measure and therefore, would not need the above-noted reconciliation and explanation. The Exposure Draft proposes to continue to permit the inclusion of adjusted earnings per share measures in the notes to the financial statements, with appropriate explanation and reconciliation. However, it proposes that such measures would not be permitted to be presented on the face of the profit and loss account. Unusual income and expense The Exposure Draft proposes to define unusual income and expenses as those with “limited predictive value” and that this is the case “when it is reasonable to expect that income or expenses that are similar in type and amount will not arise for several future annual reporting periods”. The amount and nature of items of unusual income and expense would be set out in a single note to the financial statements. The proposed definition of unusual items, with its focus on predictive value, may cause some companies to change their assessment of what unusual items need to be disclosed. Analysis of expenses The Exposure Draft proposes that operating expenses would be analysed in the profit and loss account using either the nature of expense method (e.g. raw materials, employee benefits, depreciation) or the function of expense method (e.g. cost of sales, administrative expenses). However, companies would not have a free choice of which method to use. They would have to assess which method provides the most useful information to users by reference to a number of considerations set out in the Exposure Draft. Using a mixture of the two methods would be specifically prohibited, with very limited exceptions. Where the function of expense method is used in the profit and loss account, an analysis of total operating expenses by nature would be required in the notes, with new criteria designed to curtail the amount labelled “other”. A number of companies that highlight the effect of exceptional items by including line items or sub-totals, rather than columns, in the profit and loss account would have to be careful to comply with the proposed more prescriptive rules on the layout and content of the profit and loss account. Other proposals The Exposure Draft is titled General Presentation and Disclosures, and is intended to replace IAS 1 Presentation of Financial Statements. Although the 200-page Exposure Draft makes a number of proposals in relation to the statement of financial position, the statement presenting comprehensive income, the statement of cash flows and the notes to the financial statements, as well as related changes to other IFRS standards, we have sought in this article to focus principally on some of the key proposals that would affect how the profit and loss account is presented by many Irish listed companies. The IASB has set 30 June 2020 as the date by which it requires comments on the proposals in the Exposure Draft. The IASB has included illustrative examples in the Exposure Draft to show how its proposals should be used by banking, insurance, and property investment companies. Practical implications The IASB notes that, although the proposals do not affect the recognition or measurement of assets, liabilities, income, or expense, they would have a number of practical implications that would give rise to additional costs for preparers. Examples of costs that may arise include the cost of process or system changes necessary to identify and capture the various types of income and expenses to be separated and disclosed, training costs for staff, and the costs of communicating the reporting consequences to stakeholders. The effect on covenants in banking and loan agreements may also need to be considered. Nonetheless, the IASB considers that the changes are desirable in order to respond to the demands of users and it notes specifically the benefits for the quality of electronic reporting, including comparability and consistency. Conclusion It is notable that the IASB has issued an Exposure Draft, rather than a Discussion Paper, indicating it has reached an advanced stage of confidence that its proposals should be implemented. It will be interesting to see the level of support or otherwise the IASB receives on its proposals from companies, investors, and other stakeholders. Given the scale of the changes proposed in the Exposure Draft, we can expect the reaction of the board of the IASB to comments to be closely monitored by companies whose reporting would be significantly affected, and by investors whose demands and expectations the IASB is endeavouring to meet. Terry O’Rourke FCA is Chair of the Accounting Committee at Chartered Accountants Ireland. Barbara McCormack FCA is Technical Manager, Advocacy and Voice, at Chartered Accountants Ireland. 

Raymond Donegan and Ted Webb outline the four steps to a successful sale. As a business owner, selling up is probably the most significant decision you will make in your working life. It is a difficult and often emotional process. However, with the right guidance, it can be navigated over a period of roughly six to eight months to everyone’s satisfaction. Four steps, if followed, will maximise the potential for a successful sale. Step 1: Preparation  The preparation stage sets the tone for the sale. At this point, your corporate finance adviser will draft an information memorandum with your assistance. This should be a compelling document, which will generally contain an executive summary and details of: business history; products or services offered; customers and market; future opportunities; overview of management, staff and facilities; and recent and forecast financial information. In addition to drafting the information memorandum, a comprehensive list of potential buyers should be drawn up by you and your corporate finance adviser. It is better to sell a business that is enjoying a period of growth with some suggestion of future growth remaining for the next owner. Also, if you want or need to retire by a specific date, it is best not to leave the sale too late. Specific areas of preparation to address include financial items such as fixed assets, working capital such as debtors and creditors, operating expenses, and shareholder costs. It is also crucial to assess the status of non-financial items, including management structure, intellectual property, tax status, and the business’ online presence. Step 2: Value the business and make initial contact with potential buyers The key drivers of value from a potential buyer’s perspective are the ability of your business to generate cash and its future risk and growth prospects. Several valuation methodologies can be used, including EBITDA (earnings before interest, tax, depreciation and amortisation) multiples, EBIT (earnings before interest and tax) multiples, and discounted cash flow. Once value has been established, it is time to contact potential buyers. The decision on which parties to approach will depend on the nature of your business and the type of sale process you are planning. Generally, the best result comes from a controlled auction process where several potential buyers are contacted. The benefit of this process is that, by the time the sale goes through, you will definitively know the market value of the business. Your corporate finance adviser will ensure that interested potential buyers receive an information memorandum after signing a confidentiality agreement. Prospective buyers then have approximately four weeks to respond with non-binding indicative offers, and once the offers are received, you and your adviser will decide whom to meet. Step 3: Management presentations and preferred buyer selection There is no substitute for face-to-face meetings; this is arguably the most critical stage of the entire sales process. Afterwards, your corporate finance adviser will request revised offers from interested parties. Now, you and your corporate finance adviser will decide on the preferred party. The price will play a large part in that decision, but other vital factors may include the structure of the deal and bidders’ plans for the future. You will naturally prefer to be paid in full immediately, whereas the buyer will prefer to pay over time. Ways to reach a compromise include: Deferred consideration: when an element of the consideration is paid after an agreed period; and Earnout: when the payment of deferred consideration is conditional on achieving specific financial targets such as an agreed level of sales or profits, or non-financial milestones such as renewing a contract. Once a preferred party is chosen, the heads of terms will be negotiated. This is a short document, which details the key financial and commercial terms of the deal. Step 4: Due diligence and negotiations The final stage of the process involves the preferred party undertaking due diligence on the target business, and all parties negotiating the necessary legal documents to conclude the transaction. Due diligence is akin to an invasive audit, but it is a necessary evil. It usually lasts six to eight weeks and covers several areas including financial and tax, commercial, products/services, legal/intellectual property, human resources and pensions, environmental, technical and property. Remember, the potential buyer’s view of your business can be positively reinforced if you can provide the information promptly. After three to four weeks of due diligence, the buyer’s lawyer will produce the first draft of the legal documents that will give effect to the sale. Assuming you are selling a company, these documents will include a share purchase agreement and a tax deed but may also feature other documents.  Conclusion  Selling a business is a complicated, lengthy exercise that most business owners will only do once in their lifetime. There can be a significant difference between a well-run, competitive sale process and a poorly executed transaction. An experienced team of advisers will know the best techniques to enhance value and mitigate risk for you and your business. Only by engaging with such a team can you expect to maximise your position.   Raymond Donegan is Director and Head of Family Businesses at IBI Corporate Finance. Ted Webb FCA is Managing Director at IBI Corporate Finance.

Cormac Lucey helps you turbo-charge your ability to identify and absorb relevant information in three easy steps. A close friend of mine is a retired journalist. We were in school together for several years in the 1970s. He went into journalism; I went into accountancy. In sixth year, our school won the Leinster Senior Schools cup in rugby for the first time in decades. My pal kept a copy of the following day’s Irish Independent, complete with match coverage. It disappeared under the mountain of detritus we are all at risk of gathering. Then it re-emerged after both parents had died, and the family home was put up for sale. What struck Peter, in the early part of this century, was just how thin that 1978 edition of the Independent was compared to the bulky newspapers we have today. Ironically, our newspapers are bigger and better than ever before, even as they face going down under the online onslaught. In 1978, nobody was at real risk of information overload. If anything, we suffered from information poverty back then. Today, however, we are forced to deal with an abundance of information. Separating the informational wheat from the chaff is critically important today, as each of us could be submerged in the flow of information pouring our way. I read a lot – both online and in print – and have three key rules for managing the information flow I face. Rule 1: Learn to speed read and put it into practice The average best-seller we might take with us on holidays has about 400 words on each page. It is said that President John F. Kennedy could read 2,000 words per minute, equivalent to five pages per minute. I find that hard to believe. But with a disciplined approach, it should be possible to read at speeds of 500-600 words per minute regularly. What are the core elements of speed-reading? Here is a speed speed-reading course: a) Develop the good habit of reading in a smooth rhythm; abandon the bad habit of disrupting that rhythm by occasionally going back to reread a passage; b) Instead of visually absorbing single words, get into the habit of absorbing several (three to five) words with each glance; c) Measure your reading speed when you’re reading a book and focus on getting that speed up; and d) Practice reading some trashy material at an incredibly fast pace. Then, when you read regular content, you’ll find yourself chomping at the bit speed-wise, just like when you come off the motorway and chomp at the bit at the outrageously slow speed limits then imposed. Rule 2: Focus When you read something, you are reading it for a purpose. Be deliberate about that purpose. If I’m reading a newspaper, I want useful information and I want entertainment. I also want to limit the amount of time I devote to reading the paper. I am certainly not going to read all of it. The paper owes you a duty – you owe the paper no duty. Similarly, just because you have started to read a book does not mean you are duty-bound to complete it. Our time and attention are limited. If a book is boring, tedious or just getting you down, discard it and choose another. That book may deserve the dismissive review: “Once I put it down, I couldn’t pick it up!” Rule 3: Discriminate among preferred providers I follow several financial websites closely: RTE.ie – click on “Business”, “Broker Reports” and “Goodbody” and you will be directed to a comprehensive review of the previous day’s business and economic news refracted through the prism of its implications for corporate value. Google “McKinsey on finance” and you will be directed to the website of the management consultants’ quarterly report on corporate finance themes. Each quarter, five or six issues are considered in a succinct and intellectually well-founded manner with a focus on drawing actionable conclusions. Google “Damodaran online”, and you will land at the website of Aswath Damodaran, Professor of Finance at the Stern School of New York University. This site features models, including lots of detailed valuation models; data, including important sectoral cost of capital data; and Damodaran’s blog, where he analytically considers important current financial topics. Cormac Lucey FCA is an economic commentator and lecturer at Chartered Accountants Ireland.