Ventana Research Analyst Perspectives

Transforming Lease Accounting with Better Software

Posted by Robert Kugel on Aug 22, 2013 1:48:13 PM

Because of its impact on the Office of Finance, I’ve written in the past aboutthe proposed timeline and IT implications of the convergence of U.S. Generally Accepted Accounting Principles (U.S. GAAP) and the International Financial Reporting Standards (IFRS). While the bottom-line differences between U.S. GAAP and IFRS are likely to be minimal for most businesses, some aspects of the convergence promise to be significant and problematic. One important change is how companies account for leases. The process of arriving at these rules has been contentious because it represents a major change that will entail substantial process and accounting challenges for U.S. GAAP companies. These changes are likely to go into effect as part of U.S. GAAP well ahead of any adoption of IFRS in the U.S. IT systems also will be affected, but software could smooth the transition if vendors provide a workable product.

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Topics: GRC, Office of Finance, control, error, IFRS, Business Performance, Financial Performance, Governance, Risk & Compliance (GRC), CFO, Financial Performance Management, GAAP

The Spreadsheet and the Whale

Posted by Robert Kugel on Jan 29, 2013 9:06:29 AM

Banking giant JP Morgan raised eyebrows in 2012 when it revealed that it had lost a substantial amount of money because of poorly conceived trades it had made for its own account. The losses raised questions about the adequacy of its internal controls, and broader questions about the need for regulations to reduce systemic risk to the banking system. At the heart of the matter were the transactions made by “the London Whale,” the name given to a JP Morgan’s trading operation in the City by its counterparties because of the outsized bets it was making. Until that point, JP Morgan’s Central Investment Office had been profitable and apparently well controlled. In the wake of a discovery of the large losses racked up by “the Whale,” JP Morgan launched an internal investigation into how it happened, and released the findings of the task force established to review the losses and their causes [PDF document].

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Topics: Sales, Sales Performance, GRC, Office of Finance, error, Operational Performance, Business Analytics, Business Collaboration, Business Intelligence, Business Performance, Financial Performance, Information Management, Data, controls