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SimCorp releases IFRS 9 guide for investment firms

Article reviews primary tenets of new global accounting regulation.

SimCorp, a leading provider of highly specialised software and expertise for the investment industry, announced today its guide to the International Financial Reporting Standard (IFRS) 9. The guide examines how investment firms can benefit from new measurement models and how they can leverage their IT platform to ensure compliance with the new regulation.

The IFRS 9 guide looks at how firms can prepare themselves for the new regulatory standards set by IFRS 9. The article also suggests that IFRS represents a “golden opportunity” for investment managers in terms of accounting policies. Rather than abiding by a four-pronged classification system, IFRS 9 condenses financial asset categories down to two.

IFRS 9, set to roll out on 1 January 2013, governs the complex and rule-based provisions of tainting, reclassification and impairment as required by the current International Accounting Standard (ISA) 39. The new regulation requires firms to classify their assets into one of two measurement models: (1) the amortized cost model, or (2) the fair value model. These classifications are aimed at simplifying the reporting process mandated by the regulation and stand to benefit the increasingly global marketplace of the investment management industry.

David Mackaway, general manager of operations for Australia-based Challenger and author of the article, comments on the role of IT in ensuring compliance. He said, “Challenger was fortunate to have strategically made the decision to have a centralised and very flexible asset system to cater for its business needs, provided by SimCorp Dimension. We put a great deal of effort into the implementation of SimCorp Dimension, which in the end has meant very limited additional effort on our part in implementing IFRS 9.”

“As the regulatory environment continues to evolve, we are committed to providing our clients with an IT platform that can support various needs,” said Peter L. Ravn, chief executive officer at SimCorp. “SimCorp Dimension’s flexibility in terms of functionality and asset-coverage allows our customers to ease into this new regulatory environment and ensure compliance in the future.”