GROUP MOVES
Convergence
Current status
Coming soon
A snapshot of current accounting procedures reveals that two main types of
accounting systems exist: rules-based and principles-based. The Financial
Accounting Standards Board (FASB) in America has tended to favor a rules-
based system, which very clearly prescribes what should be included in
financial reporting and how. IAS on the other hand, is a principles-based
approach. Throughout the last few decades, there has been much debate on the
relative merits of the two. This may be coming to an end, with both approaches
proving to be open to abuse or 'aggressive accounting' as it has euphemistically
been termed. The IASB and FASB recently published joint press releases on
their 'memorandum of understanding' to work towards convergence of the tivo
systems and their agreement to use identical wording in their guidelines.
tion. Workstreams were created to deal
with affected areas in a targeted fashion
(reporting, systems, derivatives and hedg-
ing, securities, lending, economie capital
and insurance products). The reporting
workstream, for example, resulted in the
creation of the new accounting manual
and forms. Another important develop-
ment during this stage was the decision
to create a new central department to
deal with derivatives and hedging under
IAS rules. This is the area most signifi-
cantly affected by IAS (see sidebar, page
30). Many issues were solved in this
phase but some needed more investiga-
tion. 'RI members participate in Group-
wide Special Topic Streams, which run
parallel with the implementation of those
issues already resolved,' says Hassink.
Rabobank is now in the third and final
phase of the program, with IAS being
embedded throughout the network.
'Within RI we have opted for a "water-
fall" approach in the final implementa
tion stage,' Hassink states. This means
that the implementation of IAS will be
trialed and refined in a small number of
pilot offices before being applied to the
rest of the network. 'A feasibility study
in March 2003 involved: Hong Kong,
New York, Ireland plc and, because of
its very specific product line, the RNPM
depart-ment, one of the two main
Corporate Finance vehicles in the
Netherlands.' The objective of the study
was to execute a gap analysis of the new
reporting requirements and anticipate the
systems impact for each of the offices.
Hassink continues, 'Studying this group
enabled us to refine the reporting manual
and forms and training methods before
moving onto the second group.'
Currently, six offices (Australia, Belgium,
Brazil, Poland, Singapore and ACC Bank
in Ireland), the second group to go
through the 'waterfalP, are receiving four
days of training on reporting under IAS.
The first two days focus on the new
reporting requirements includ-ing an
in-depth explanation of the new forms
and manuals and the differences to
current requirements. The remaining
two days involve a first look at the actual
data of the offices involved. In parallel
with this, the offices in Utrecht and
London are undertaking a similar
exercise, with Group Treasury Support
taking respon-sibility for the implemen-
Jan Bos - guidance and support
Renate Hassink - using awaterfall' approach
The Word I 29
