Global Connect Admin B.V in partnership with the DNHK are holding a German webinar on 15 June 2022 at 12:00, titled “Einführung in Global Connect Admin BV & Global Connect Consultancy BV Ein kurzer Überblick über Amelkis XBRL. Register on the following link: https://lnkd.in/eSKqWcQg #webinar #xbrl #german #globalconnectadmin #globalconnectconsultancy #DNHK
Through adversity we grow and this year’s summit taught to inspire just that; the tools needed to adapt in this vast – changing world and in every step of the way, to grow and draw strength and purpose from what has happened in the past.
The PS provided a platform for actionable insights, inspiration and networking with over 2000 meet-ups held per day at the 2021 Summit. Global Connect Consultancy B.V., together with Global Connect Admin B.V. again this year enriched their professional know-how and built on its vast & steadfast network!
It is the ability to find harmony in the noise and to know there is a safety net when we err. According to Itay Talgam this can be achieved by our ability to recognize and explore gaps, our decision to interpret the plans we create. This speaker is an orchestral conductor who teaches leadership by looking at examples of world leading maestros. In his book The ignorant Maestro Talgam explains that sometimes the best way to stimulate and let people develop their full potential under your direction is to be ignorant. Leaders do not have to be the one who knows everything, but the one who helps his leaders to develop their full potential and to coordinate the team so that those energies flow in a common sense, as happens in a well-assembled orchestra. He teaches his audience not to mind the gaps but to use them.
Other experts on the stage included Daniel Pink, expert on human behavior who aims to teach businesses that regret is both healthy and universal and an integral part of human life. Regret is not abnormal or dangerous, it clarifies what we value and teaches us to be better if we can learn from it.
Dr. Frederik Pferdt, CIE of Google teaches around the central idea that “it’s important to create an environment where everyone is allowed to bring in opinions”. His teachings focus on human mindset and how it channels our inner attitude towards every external event and how to reprogram our negativity bias and start inventing a better future, today.
Noteworthy insights from Linda Hill included inter alia that “most innovations arise from the collision of different ideas, perspectives, and ways of processing emotions”. Organizations are increasingly faced with pressure to innovate, but lack the tools to fuel, inspire and sustain that innovation. In summary the professor teaches her audience to reduce their should’ve and could’ve; be collaborative-ready; develop your successors and paying attention to both scale and speed.
We would like to thank our hosts at this years’ President’s Summit for the outstanding event that was had! Your hospitality is remarkable and the teachings are what we will draw from in the coming year. Thank you!
Join the leaders of future, the investors of tomorrow, and the founders of TODAY! Join Global Connect Consultancy B.V., your trusted partner in financial reporting – today, tomorrow and into the future. Our professional global team will ensure that you regain control of your financial data, allowing you to focus on your core business.
The European Financial Reporting Advisory Group (EFRAG) has released exposure drafts (ED) of the European Sustainability Reporting Standards (ESRSs). With this proposal, requirements are set out for European companies to report on various environmental, social and governance (ESG) topics including societal impacts, risks and opportunities.
The European Commission’s proposal for a Corporate Sustainability Reporting Directive (CSRD) envisages the adoption of the EU Sustainability Reporting Standards (ESRS). Regarding the latter, EFRAG was requested to assist the European Commission in establishing Sustainability Reporting Standards.
EFRAG, as a technical advisor, aims at providing relevant stakeholder information and analyses on sustainability and ESG subjects to the European Commission. This is done to inform the manner of ESRS adoption by the EU. EFRAG decided to launch the public consultation based on the exposure drafts created under the responsibility of the Project Task Force (PTF-ESRS).
A consultation period of 100 days has been launched with the deadline of 8 August 2022 wherein companies can comment on the draft and share relevant information. Incorporating the input and result from the public consultation together with the feedback on the exposure drafts, EFRAG will agree on the final set of draft ESRS to be submitted to the European Commission.
After further evaluations, the finalised version of the ESRS applies the new sustainability standards according to the disclosures made under the EU’s Corporate Sustainability Reporting Directive (CSRD). Bridging finance and sustainability, the ESRS promise to expand mandatory sustainability reporting to European companies as the ongoing drafts are a “journey towards a faithful representation of sustainability performance”.
EFRAG invites comments on all aspects of the draft ESRS and expects feedback no later than 8 August 2022.
With the opening of the Chinese economy to foreign investments in the past 40 years, China is transforming into a global economic hub. However, with the standardisation of business administration with the International Financial Reporting Standards (IFRS), foreign investors need to be cautious of the differences between the global IFRS and the local Chinese GAAP. In this article, these inconsistencies between IFRS and Chinese GAAP are getting analysed, as well as looking into the optimal preparation for this challenge.
To increase the foreign direct investment (FDI) into the Chinese economy, the Public Republic of China (PRC) implemented special economic zones (SEZs) to further develop towards the biggest global economy. Hence, on the business administration level, this inquires for own accounting rules referred to as the Chinese Accounting Standards (CAS) or the Chinese General Accepted Accounting Principles (Chinese GAAP). While the CAS is implemented to reduce financial fraud or to optimize China’s tax strategy, in an international context the function of IFRS is to streamline international accounting regulations and transparency. Meaning, that the IFRS should be applied on top of the CAS so that the company can both adhere to the international and the local rules. Nowadays, while China starts to converge more with the IFRS principles, the Chinese GAAP still differs from the well-known and familiarized IFRS trademarked by foreign investors.
The organ of the Accounting Regulatory Department of the Ministry of Finance (MoF) is responsible for setting the accounting standards in China. As the previous regulations of the CAS were mainly concerned with sorting a balance sheet of the state-owned industry in the socialist era, the regulations in current years are aimed to reflect the financial status, analyse the operating results, and maintain transparency (for the state). The Chinese GAAP has two subordinate accounting policies:
In 2001, the GAAP initialy included the Accounting Standards for Business enterprises (ASBE01), however, the ASBE01 was in 2006 further transformed into the ASBE06. The ASBE06, which currently is still required for all publicly traded enterprises in China, is the main set of accounting measurements. Luckily, the Chinese GAAP (ASBE06), has key similarities with IFRS. For small-sized business cooperations, there is a special set of accounting measurements called the Accounting Standards for Small-Sized Business Enterprises (ASSBE). This standard can be seen as a merger between IFRS and ASBE06 and has the goal to make it easier for small enterprises to follow the tax regulations and accounting standards.
Differences Chinese Generally Accepted Accounting Principles (Chinese GAAP or CAS) and International Financial Reporting Standards (IFRS)
Knowing that the CAS and IFRS have similarities, it is evident that the foreign investor should be aware of the regulations that differ within these sets of accounting rules. Hereby the differences between the CAS (GAAP) and IFRS:
- Valuating Fixed Assets
Whereas the IFRS has the choice to utilize the preferred method of valuating fixed assets, the CAS does not endorse this flexibility. In IFRS, one can opt for re-evaluating the assets or use the historical-cost valuation method. In CAS, only the latter is agreed upon to be used when valuating fixed assets.
- Implementation Delays
Whenever IFRS updates/changes are released, these new IFRS rules are not immediately, and in some cases never, adopted in the CAS. In short, the Ministry of Finance (MoF) will review the latest release of the IFRS and see if it can be adopted into the China business framework. For foreign investors, this means that 1) the IFRS updates are delayed, 2) the IFRS might never be applied and thus results in 3) the IFRS regulations can be different than in other countries. This can lead to serious problems in companies with an overarching implementation of IFRS changes (e.g. software) in all of the subsidiary ventures.
- Common Services in China
When handling cases of common service in China, the CAS has a more detailed description of the situation. For example, In the case of merging two companies with similar interests and under the control of one entity. The CAS requires a restatement of the figure while IFRS has no specific rules for this situation.
- Uncommon Services in China
Opposite to the previous point, uncommon situations in China are less detailed than the IFRS counterpart. The Italian-Chinese Chamber of Commerce exemplifies this difference by looking at employee benefit plans. The CAS has no specific rules for staff benefits offered by international firms besides payments in the firm’s stock. In the case of using benefits packages for its subsidiaries, the mother company can get into serious problems and should always have contact with the MoF to address and record such transactions accurately.
- Fiscal Year
The fiscal year of the CAS starts from January 1st, while the start of the fiscal year can be decided by the company when applying IFRS. Regarding IFRS, the year must be 12 consecutive years.
How to successfully do business in China regarding the Chinese Accounting Standards?
To minimalize the potential risk of conflicts with the law, it is recommended for foreign investors to notice the differences between CAS and IFRS and apply both of the accounting standards in the right way. In this process of familiarizing with CAS, the differences should be known, and the contact between the firm and the Ministry of Finance should be optimal to resolve challenges and uncertainties. Moreover, be aware that the CAS can only be filed in the China language, and that short-cuts in the Chinese accounting world often result in serious delays and non-compliance: further complicating the international business. Thus, in the case of maintaining an overview of both CAS and IFRS, even while it is about 90-95% similar, it is recommended to have (specialized) agencies on your side. With experts on the topic, it is evident that the venture is assisted by experience. This way, the short straw will not be drawn when dealing in an unknown and new business environment.
For more assistance in the field of IFRS, the newest software by Amelkis can support enterprises to customize and analyse data while preserving an overview of the IFRS regulations.
If interested in personal advice regarding international business advice, tax situations or consolidation (in China), Global Connect Admin B.V. can assist you with these challenges due to the rich experience and framework of connections.
When intrigued by the personal IFRS-software solution, Global Connect Consultancy B.V. offers help with the installation, optimization, and customization of the Amelkis software Solution.
Header image by Mikael Bomkvist
Every year organizations, accountants and regulators keep up to date with local and international rules and laws regarding accounting and finance. In recent years, digitalization is rapidly growing, including electronic formats and reports. Therefore more European countries start to apply the European Single Electronic Format (ESEF). While the world of financial services moves towards international standards and formats instead of localized ones, each country does this at its own pace. What can we expect from ESEF, and why is it convenient to use this electronic reporting format to prepare annual financial reports?
ESEF is assigned by the European Securities and Markets Authority (ESMA), an independent EU Authority. ESMA has one mission in mind: enhancing investor protection and promoting stable and orderly financial markets. Therefore, this EU Authority safeguards the stability of the EU’s financial system. This safeguarding includes the protection of investors while promoting stable and orderly financial markets. They mainly assess risks to investors and markets, contribute to a rulebook for EU financial markets, and promote supervisory convergence and directly supervising specific financial entities.
ESMA wishes to make reporting easier for issuers and facilitate accessibility, analysis and comparability of annual financial reports. The digitalization of annual financial statements in the EU is nothing new; in 2013, the Transparency Directive amended a requirement for electronic reporting formats. Only recently, ESEF became mandatory, with the following criteria:
- Issuers must prepare annual financial reports in XHMTL;
- Annual financial reports that contain IFRS consolidated financial statements must be labeled with XBRL ‘tags’;
- The XBRL ‘tags’ must be embedded in the XHTML documents with Inline XBRL technology;
- The taxonomy must provide the hierarchical structure used to classify financial information. This classification is essential for structured electronic reporting using XBRL as an extension of the IFRS taxonomy
- Mark-up disclosures using the taxonomy element must have the closest accounting meaning to the marked up disclosure;
- Primary financial statements must be marked up in detail, with the application of mark-ups for the whole sections of the Notes, otherwise called block tagging.
ESEF is more than just the digitalization of financial reports. To ensure your company publishes the annual financial statements correctly, constant attention to detail is in order. While ESEF is mandatory in the EU, the XBRL-format is still in the application process. Even with one format and one accounting standard, per country rules and annual reporting laws may differ. We at Global Connect Admin BV make sure we stay up-to-date with local changes, so if you have any questions, or wish assistance regarding ESEF, fiscal reporting and cross-border transactions, feel free to contact us anytime. We would love to help out.