Network News IRELAND / NOVEMBER 2011
CIMA leaders in business Peter Oâ€™Neill Managing Director IBM AICPA and CIMA to offer new CGMA designation Best CIMA tutor in Northern Ireland
Contents 3 Patrick Barr, Chairman CIMA Ireland 4 CIMA Ireland board 5 CIMA students in Ireland remain confident about future job security 6-7
CIMA leaders in business, Peter Oâ€™Neill, Vice President IBM
Best CIMA tutor in Northern Ireland
10-11 CIMA Global Business Challenge Irish final 12-13 The Financial Reporting Standard for Medium Sized Enterprises (FRSME) 14
Northern Ireland annual awards
New CIMA global president and CIMA Ireland new office opening
Upcoming member events
CIMA Diploma in Islamic Finance update
20-21 Case study - Paula Roberts, Ireland West Airport 22
CIMA MY JOBS, CIMA Ireland web update and Facebook
MSc in Strategic Management Accounting
CIMA IRELAND | 5th Floor | Block E | Iveagh Court | Harcourt Road | Dublin 2 | Ireland T. +353 1 6430400 | F. +353 1 6430401 | E. firstname.lastname@example.org
Chairman’s message Patrick Barr Chairman CIMA Ireland
This is the first edition of Network News following the merger of CIMA Northern Ireland with CIMA Republic of Ireland to establish a single all island body, CIMA Ireland. From the outset I would like to say that I am most honoured to be appointed the first Chairman of CIMA Ireland. I am particularly looking forward to meeting many of you during my term and to sharing with you some of the important initiatives currently underway that will capitalise on new and existing opportunities arising from the merger. CIMA Ireland is the result of a lot of time, effort and commitment to a long term strategic programme on the island of Ireland. In this context, I would like to take this opportunity to pay tribute to two individuals Harold Baird, current Global President CIMA and a former Northern Ireland president and to Tom O’Connor, CIMA Ireland and UK Council representative and a former president CIMA Republic of Ireland. It was the foresight and vision of both these men that led to the formation of one all island professional organisation. That organisation, CIMA Ireland, brings together two strong bodies whose combined strengths will provide more benefits and opportunities to its membership. We now have almost 183,000 members and students in 168 countries – and these are not just numbers, but professional people who make up our global organisation – all contributing to the collective strength that every member enjoys. CIMA Ireland has almost 8,000 members and students and that
number is increasing at a rate that latest figures suggest is far outpacing our peers. Despite or perhaps because of the domestic economic climate, CIMA qualified and part qualified management accountants are in demand more than ever here in Ireland. Our figures are continuing to grow significantly and are exceeding target growth rates. This reflects both the demand for skills sets of CIMA qualified management accountants and the growth in specific sectors of the economy, namely FDI and exports where our membership has a large representation. In line with increased FDI investment both in the Republic of Ireland and Northern Ireland, exports continue to grow with particularly strong performances in pharma, agribusiness and financial services. The marked growth of CIMA in Ireland over the last couple of years and its ability to identify and to capitalise on the opportunities, even in a downturn, is the result of an integrated, strategic approach involving intensive and direct engagement with industry, education providers and other professional bodies. Engagement has and will continue to be core to CIMA Ireland’s strategy.
employers who are now engaged with CIMA training programmes and who are CIMA development accredited – these include many large indigenous businesses and multinationals. In tandem, CIMA has successfully extended the choice of tuition options and routes to studying CIMA so that potential members and students can now tailor their studies in line with professional and personal demands. CIMA has also forged strong partnerships with a number of strategically located business schools to facilitate; the delivery of CIMA blended tuition, the establishment of nine CBA examination centres, the provision of internship and mentoring programmes, the introduction of a fast track route for MBA graduates and the launch last year of Ireland’s first MSc in Strategic Management Accounting through our close working relationship with the UCD Michael Smurfit Graduate Business School. Most recently, CIMA introduced the CIMA Diploma in Islamic Finance (CDIF) in tandem with the government’s policy of positioning the IFSC as a European hub for Islamic finance. More details on the CDIF are provided in this issue of Network News.
Specifically CIMA has embarked on an intensive programme of engagement with employers, through both training co-ordinators and the “CIMA buddy” network made up of CIMA senior management representatives in key organisations. Over the past 12 months we’ve built up a significant number of
CIMA Ireland board At the inaugural meeting of the CIMA Ireland board established following the merger between CIMA Northern Ireland and CIMA RoI were from l-r front row: Sheila Lewis; Alan Flanagan, Deputy Chairman; Patrick Barr, Chairman; Kevin Gahan, outgoing President CIMA Republic of Ireland; Jacinta Nolan; back row: Niall Hennessy; Tom O’Connor; Nigel Patterson; Michelle O’Rourke; Frank Nolan; Sharon McCue; Sean Molan ; Brian Duffy; Mark Connolly; Eric Rochford and Denis McCarthy, CIMA Ireland Director.
4 NETWORK NEWS
CIMA students in Ireland remain confident about future job security
Irish CIMA students are confident about their future job security, according to the latest global CIMA Ireland student salary survey. CIMA comprises 8,000 members and students and recently admitted its 4,000th fully qualified member. Compared with two years ago, fewer students now think there will be further deterioration in the Irish economy. Substantially lower proportions than in 2009 anticipate a salary freeze, budget cuts, jobs cuts, a recruitment freeze or a fall in the overall profitability of their organisation. Although there are no expectations for increases in staff expenditure such as salary increases, recruitment or staff training. Indications of growing confidence are reinforced by a significant decrease since 2010, in those expecting a salary freeze (59% in 2010 to 31% now). The number of Irish students who fear redundancy in the next year has also decreased to 7%, compared to 15% last year. Furthermore, despite the recession, only 15% are now considering moving to another country to find work, compared to 28% of Irish students in 2010. At the same time over 58% of CIMA students remain confident enough to consider changing jobs within Ireland during the next two years. The theme continues when it comes to business performance, with just
Loretta Mills, ACMA Commercialisation Finance Manager - ROI & Benelux Kellogg, who was admitted as the 4,000th member to CIMA Ireland.
22% of students saying the profitability in their organisations will likely fall during 2011, compared to 61% in 2009. The survey shows the growing confidence students have in the strength of the economy and in the resilience of business on a global scale. In 2009, 71% of CIMA students in Ireland said they’re expecting to see organisational budget cuts in the coming year. In 2011 this has fallen to 31%. CIMA students are confident that the worst of their organisation’s cutbacks are over with one fifth saying they do not expect a recruitment freeze to happen this year – this is down from last year. In Ireland the average annual student remuneration package (salary and bonuses) is €45,164. After five years of experience, part qualified CIMA students in Ireland earn on average €17,348 more in salary and bonuses than those at the early stages of their career. The qualification is also seen as being adaptable with 80% of Irish students saying that it will enable them to move across all areas of a business. And 93% believe that studying for the CIMA qualification will create greater career opportunities.
CIMA LEADERS IN BUSINESS
Peter O’Neill Managing Director IBM Ireland
In our series of interviews with CIMA business
leaders, journalist Jim Aughney talks to Peter O’Neill FCMA, Managing Director of IBM Ireland. From a young age Peter O’Neill had a clear vision of his future career path. ‘I left school at the age of 17 at a time when college was not on the agenda because of the economic circumstances in 1976. I looked closely at the various options for work and decided that accounting was a good way of getting into the business world. Of the accounting qualifications I felt cost and management could provide an MBA type qualification,’ Peter explains. Having decided that CIMA was the best way to proceed, the young school-leaver wrote to the top 100 companies in the country seeking a position. He was accepted by Guinness and opted to join the brewery as it had a formal management trainee programme in place. Over the next four years O’Neill worked in accounting at St.James’s Gate but also in marketing, information technology, audit and tax. ‘It was a very good management training scheme. But after three and a half years or so, I made the decision that I wanted to experience how other organisations operated. I saw an opportunity at IBM so I applied there and in 1981 I joined as a financial accountant,’ O’Neill explains. IBM was a totally different organisation than Guinness at the time and the young accountant was struck by how young his co-workers were on joining the US multinational. ‘I intended to stay a few years and move on. However, after some time in the financial area I was asked to get involved in the planning area and then I got an assignment to move to the European headquarters in Paris. This showed me how the company operated outside of Ireland,’ he recalls. Moving to Paris was not a big issue for O’Neill who was single at the time. Later assignments in the USA took place when his family was quite young. ‘It was probably harder on my spouse than on me to adjust to life abroad’ he explains. The young accountant caught the eye of the managing director who asked if he would like to broaden his accounting
6 NETWORK NEWS
skills into a management role. At that stage O’Neill had corrected any perceived lack of third level education by studying economics and politics for a BA at UCD after qualifying as an accountant. O’Neill then became executive assistant to the vice president in strategic planning which was a role he says that allowed him to ‘watch how it’s done’. He then moved to a senior sales role in the UK where he was involved in the banking sector dealing with top clients like Barclays and the Co-op Bank. By 1991 O’Neill was back in Ireland working in a number of senior sales management roles in charge of sales management teams. ‘In that role I learned how to manage very technical people’ he says. In 1995 the chief financial officer at IBM retired and O’Neill was asked to move back into finance. ‘It was great to have a sales perspective for that CFO role,’ he recalls. At the time IBM employed about 500 people in Ireland and IBM was in the process of looking at how it was organised. Between 1995 and 1997 O’Neill was closely involved in IBM’s multi-billion dollar investments in manufacturing at Mulhuddart which brought Irish employment numbers from 500 to 3,000 in a few years. ‘The focus in Ireland was international mission based and I spent a lot of time in the US in corporate HQ and in different manufacturing locations between 1998 and 2000,’ he says. O’Neill changed roles again and from 2000 he was asked to come back in as financial controller of the IBM technology campus. After that he became sales director at IBM for over seven years. O’Neill has been managing director of IBM Ireland for over a year now and his appointment to the top job is a testament to the risks he took in his career at the IT multinational. ‘You have got to take risks along the way. When I speak to our
CIMA LEADERS IN BUSINESS
‘You have got to take risks along the way. When I speak to our people, I encourage them to get as much breadth as possible in their careers. Most people have a lot more capability than they think.’
people, I encourage them to get as much breadth as possible in their careers. Most people have a lot more capability than they think,’ O’Neill says.
IDA on that. We have had to compete for every single piece of investment. We have to answer the question which is asked…why Ireland?’ he says.
Looking back on his career O’Neill believes that CIMA has been a ‘super qualification’.
One of the key things in Ireland’s favour in corporate IBM is its ability to change. ‘There has been re-skilling of our whole workforce really’ O’Neill says. ‘There is a view in the corporation that Ireland is a place to get things done.’
As well as financial accounting, management accounting teaches you to look at the business in total and to examine marketing, human resources and legal aspects. ‘I’ve spent a lot of time working with people who want to get into the financial end of things and CIMA is the way to go. I also meet a lot of people in my work with a CIMA background who are in very diverse roles’ he says. Looking back on his career O’Neill says IBM was a totally different company when he joined in 1981. ‘It was a big hardware company and our main activity was selling mainframes to large organisations. ‘I moved from a paternalistic organisation in Guinness at the time which was over 200 years old to a modern younger company in IBM where the average age was much younger and there was a focus on hiring graduates’ O’Neill recalls. The company employed 400,000 people worldwide at the time and as a result of changing technologies almost went bang. ‘We halved the workforce to 225,000 since the nineties and are now largely involved in software and services and bringing employment back up to 400,000. In Ireland we employ over 3,000 people in a very broad range of activities. We employ 700 people in a dotcom sales centre with a further 1,000 employed in software development labs in Dublin, Cork, Galway and Belfast.’ IBM also employs 200 people in its research labs in Ireland and is currently hiring 75 PhD graduates. ‘Relative to our size we have a very diverse range of activities’ O’Neill says. In the past the company in Ireland was successful in winning major investments in manufacturing and call centres. ‘We needed to move up the value chain’ O’Neill explains ‘so we created high end jobs in research and worked with the
While there have been huge re-training programmes at IBM, there were some voluntary redundancies for those where retraining was not suitable. IBM Ireland is a small unit in the corporation in terms of the size of the domestic market. ‘We have been successful in growing domestic sales’ he says. When O’Neill joined IBM it was primarily a finance and distribution operation. ‘Ireland is now a strategic investment location for IBM. Where we have gotten new missions we have sustained them. The group is a globally integrated enterprise with more and more people with a multi-cultural background. In IBM Ireland we have 60 different nationalities employed’ O’Neill says. Turning to the domestic market, O’Neill says the company has taken significant market share in recent times partly as a result of the economic downturn. ‘As companies face pressures they look at their core skills and out-source functions such as IT. There is a lot of growth there (in outsourcing) and in software’. IBM Ireland has not been severely impacted by the collapse in the property sector. ‘Property developers weren’t our market really but there has been an impact on the financial institutions who are not spending as much on IT investment” he says. Looking at the recent performance of the Irish economy O’Neill feels that ‘we lost the run of ourselves but have made good strides in restoring competitiveness’. IBM didn’t get involved in the heating Irish economy as it has ‘never been our approach to pay more than the market rate’. ‘We have made good progress over the last few years and hopefully this work can continue in the public sector,’ he concludes.
Tom McStraw ‘Best Northern Ireland CIMA lecturer’
At the recent presentation in Belfast City Hall, of CIMA Northern Ireland awards for 2011, Tom Mc Straw was voted ‘Best Northern Ireland CIMA lecturer’ for the second year in succession, as voted for by CIMA students. Tom reveals a bit about himself to CIMA Ireland in the following interview. Did you do a degree in accountancy before starting your working career? No. I did an honours degree in philosophy at Queens University Belfast. Like so many other people at that stage I did not have any clear idea as to what career I wanted to follow so ended up doing a degree in something I enjoyed. It did mean that when I started my accountancy training I had the big advantage of knowing for certain that I knew absolutely nothing about accountancy and therefore had to start to learn as much as I could! Given that you are in the later stages of your career (that is the kindest way I can put the question!) presumably you have been teaching for some considerable time? No. I only started accountancy lecturing about eight years ago. Prior to that I had been doing a lot of presentations in my job which had gone very well and I began to think that perhaps I could make a full time career out of this. I wrote a letter to BPP Ireland in Dublin asking if I could be of any use to them and they engaged me to take on a few of their courses in Dublin and Galway. The professionalism and quality of that organisation was tremendously helpful in making sure that I did not let my own standards slip. Subsequent to that I was employed as an associate lecturer at the University of Ulster primarily engaged on CIMA courses, and that is of course where my potential voters for this award are based!
8 NETWORK NEWS
What did you do before you got involved in lecturing? I worked in industry for over ten years. Most of that time was in the drinks industry where I became finance director at Bushmills Distillery and subsequently finance manager at the parent company in Dublin, Irish Distillers Group. Given the length of time that whiskey is matured inventory valuation was always a critical figure! It also had the advantage of when people asked where you worked you did not have to say much for them to quickly understand what it was! It was a great business to learn from as all the business disciplines of marketing, production, new product development as well as finance had tremendous importance. I was also very fortunate to have a tremendous mentor in Mr Gene Savage (needless to say he is a CIMA member!) who was the group finance director and he provided me with tremendous motivation to progress my career. For any CIMA students or young CIMA members I cannot emphasise enough the benefit this can be to your development if you are fortunate enough to be in that position. Following my spell in industry I spent another ten years or so in venture capital. This moved me to the other side of the table - instead of the seeking of finance it was the supply of finance .This gave me a tremendous insight into the more entrepreneurial type of business and how financing proposals can best be put together. From there it was into lecturing - undoubtedly I feel that the combination of the two types of business experience above have been tremendously helpful in lecturing. It allows me to be able to move away from theoretical principles and give concrete business examples which are then more meaningful for the students. What subject areas do you teach? I mainly focus on the strategic level papers, particularly Financial Strategy and also Performance Strategy. I also do Performance Management and Enterprise Operations. Given the business
‘Whatever idea you might have or proposal you might want to get across at a business meeting or in a lecture room always try to capture it on one piece of paper as opposed to a lengthy report or handout document.’
emphasis in the CIMA qualification and my own business background I can probably teach on any of the CIMA papers with perhaps the exception of the financial reporting papers. I fortunately have a daughter who is a qualified accountant and is the expert in this area – coincidentally she also won a CIMA award in management accounting while an undergraduate. The recent business and economic developments over the last five years have been tremendous in terms of illustrating some of the key aspects of the strategic level papers. The banking crisis in terms of the excessive risk taking involved and the focus on the bond markets makes it all the more real for students. The attention these matters have been getting in the media also bring it the front of students’ minds. I feel the Irish media are particularly good in their analysis of these topics. Do you only teach CIMA courses? No. A lot of my work is on CIMA courses but I also teach on ACCA and CIPFA courses in the broad areas of financial management and management accounting. The precise qualification is not so important as opposed to the subject area of the course and provided it is in the business area as opposed to something like financial reporting and auditing then I am happy. Why do you think students have voted for you? It’s hard to say - I often feel I should sit down with them some time and ask them! Comments students have made to me include that they feel I keep my material very fresh in the context of recent business developments and that I focus well on the style of the exam paper and the approach the students need to take to the paper. Is one year not very much the same as the next year in terms of your lecturing?
change in the delivery of the courses. For example the use of tablet laptop technology enabling me to switch instantly from theory to building up calculations has become the norm in the lecture room. In addition I find myself making increasing use of online support for lectures. This, coupled with the constant flux in the business and economic environment referred to above, means that the content of the material in the lecture room is constantly changing also. If you could only offer one bit of advice to a student in relation to an exam paper what would it be? Accept before you go in there will be sections you do not know how to do (and so therefore when you see them in the exam room you do not need to panic!) but remember you only need 50 marks to pass. Just look around the paper, do the things you find easiest first and leave the sections you find troublesome to later and just do your best on them –with the time pressure on some papers you probably won’t have time to do the difficult stuff anyway! What is the best bit of advice you have been given which has been most helpful to your work? Whatever idea you might have or proposal you might want to get across at a business meeting or in a lecture room always try to capture it on one piece of paper as opposed to a lengthy report or handout document. This also applies to an idea you might want to discuss with your manager. I found that this forced me to think very hard about any given topic in terms of what the core points were and make sure they get put across early in my delivery. I feel this principle also applies to a verbal presentation – I always feel if you are not able to explain something in three to four sentences then you probably can’t explain it all! It does not mean there may not need to be a lengthy report/handout in addition where people who want to can drill down into more detail. Less is more!
No. During the relatively short period I have been engaged in lecturing there has been and continues to be tremendous NETWORK NEWS
Cork team wins national final of CIMA Global Business Challenge This year’s Irish final of the CIMA Global Business Challenge was held at the UCD Quinn School of Business. University College Cork went on to take the overall title for the second year running competing against 11 other business schools from around the country. The team went on to represent Ireland at the international final of the CIMA Global Business Challenge in China, where they came in a very impressive fourth place.
Winners – UCC. This year’s winners of the Irish final of the CIMA Global Business Challenges pictured are from l-r: Kevin Gahan, Former President, CIMA, Republic of Ireland; Gary O’Mahony, UCC; Robert Sweeney, UCC, Dr. Margaret Healy, Accounting and Finance, UCC; Hazel Grimes, UCC and David White, UCC.
10 NETWORK NEWS
Runners up – UL. An all female team from University of Limerick pictured with Kevin Gahan, Former President, CIMA following the final were from l-r: Ciara Wickham; Ellenor Browne; Joanna O’Connor and Erin King all from University of Limerick.
Runners up – GMIT. The GMIT team pictured after the final from l-r: Paul Nicholson; Qaseen Mehdi; Michael Forde and James Crowley.
ion t traen s i g p Re O AITI – LEADERS IN TAX
Give Your Career A Competitive Edge AITI – A World of Opportunity
> Our AITIs hold key tax and financial positions in 30 of the Top 50 companies in Ireland > Ireland’s leading professional services firms educate their people through the Irish Tax Institute
> The Irish Tax Institute is the only professional body in Ireland focused exclusively on tax > AITIs travel across the world, working with the big firms in London, New York, Hong Kong, Sydney & Shanghai Location: The course is offered nationwide with venues in Dublin, Cork, Limerick, Athlone and Galway (subject to demand) Study options: Lectures take place at weekends only and students can select from 2 courses and 2 examination sittings per year Fees: Course fees include all course materials, tuition and examination fees with flexible payment options available
Exemptions: CIMA members are exempt from 3 out of 4 papers of AITI Fundamentals: Part 1. CIMA students who have completed the CIMA Certificate level exams are eligible for exemptions from our law and accounting modules Register: Online at www.taxinstitute.ie/ education for our AITI winter course
Bernard Doherty Partner Grant Thornton Dublin
Tax Manager Airtricity Dublin
View the AITI prospectus online at www.taxinstitute.ie/education Visit: www.taxinstitute.ie E-mail: email@example.com Tel.: Carol Dooley on: +353 1 6631748
Carol Hogan Associate William Fry Solicitors Dublin
The Financial Reporting Standard for Medium Sized Enterprises (FRSME) Robert Kirk Associate Professor of Accounting and Finance University of Ulster
In October 2010, the Accounting Standards Board (ASB) published FREDs 43 and 44 as a first step in introducing a precised version of full IFRS for companies who are not publically accountable (i.e. not listed nor a financial institution). The FRSME is proposed to replace current UK GAAP for accounting periods commencing on or after 1 January 2014, and is very largely based on the principles in the IASB International Financial Reporting Standard for Small and Medium Entities (IFRSSME). There are a number of differences between current UK reporting and the FRSME which practitioners and management should be aware. These are briefly covered below.
Fixed asset - revaluation UK/Irish GAAP currently permits classes of fixed assets to be revalued to market value and FRS 15 Tangible fixed assets requires these valuations to be kept up to date where the revaluation model is adopted. Under FRSME, however, revaluation of property, plant and equipment is not permitted. Borrowing costs FRS 15 Tangible fixed assets permits borrowing costs to be capitalised as part of the cost of construction of a fixed asset provided certain criteria are met. However, under the FRSME, the capitalisation of such costs is banned and therefore must be written off to profit and loss as they are incurred. Investment properties SSAP 19 Accounting for investment properties requires investment properties to be carried in the balance sheet at
12 NETWORK NEWS
their fair (market) value, with changes being recognised in the statement of total recognised gains and losses (STRGL) as opposed to the profit and loss account. The FRSME requires fair values to be obtained where they can be obtained without undue cost or effort, with any changes in fair value being recognised directly through the profit and loss account (income statement). Intangible assets – development costs SSAP 13 Accounting for research and development allows development costs to be capitalised if, and only if, certain criteria are met. The FRSME requires internal development costs to be written off as they are incurred, unless they meet similar recognition criteria to SSAP 13 in which case development costs must be capitalised. Revaluation of intangible assets FRS 10 Goodwill and intangible assets only permits the revaluation of intangible assets in circumstances where readily ascertainable market values can be obtained. In reality, hardly any intangible assets will have a readily ascertainable market value. The FRSME does not allow intangible assets to be revalued. Instead intangible assets will continue to be recorded at cost less accumulated amortisation and any accumulated impairment losses. Leases SSAP 21 Accounting for leases and hire purchase contracts contains a 90% ‘yardstick’ test (amongst other principles) to determine whether the risks and rewards of ownership of the leased asset have passed to the lessee. The FRSME follows similar principles in IAS 17 Leases by saying capitalisation of the lease, and recognition of a liability will occur when substantially all of the risks and rewards have been passed to the lessee. However, the FRSME does not contain the 90% ‘yardstick’ test.
Robert Kirk, regularly presents to accountants in the UK and overseas, where he is a much sought after speaker. He is also the author of a number of books on accounting standards published by CIMA.
Deferred taxation FRS 19 Deferred taxation refers to ‘timing differences’ which recognise the mismatch between the accounting periods in which gains and losses are reported in the financial statements compared to when the tax effects arise. The FRSME refers to ‘temporary differences’ which are concerned with the carrying amount of assets and liabilities in the financial statements compared to the effect on taxable profit if the associated assets or liabilities had been sold or settled at the balance sheet date. This approach is more complex than the FRS 19 approach and will likely give rise to additional deferred tax being provided. FRS 19 also allows deferred tax balances to be discounted to present day values, whereas the FRSME prohibits such a practice. Defined benefit pension schemes The FRSME provides a number of simplifications where the valuation basis (the Projected Unit Credit Method) would require undue cost or effort. It also does not require the use of an independent actuary to provide a triennial valuation as required by FRS 17 Retirement benefits. Goodwill and intangible assets FRS 10 Goodwill and intangible assets allows an entity to amortise goodwill and intangible assets if the useful economic life of these assets are deemed to not exceed 20 years. Where the useful economic life is deemed to be longer than 20 years, non-amortisation must be supported by annual impairment reviews to ensure the assets are not carried in the balance sheet at any more than their recoverable amount. The FRSME allows amortisation of goodwill and other intangibles. However, goodwill will be amortised over a default period of five years unless the goodwill can justify a longer life whilst intangible assets will be amortised over a default period of ten years if the entity is unable to make a reliable estimate of the intangible asset(s) useful life.
Business combinations The FRSME requires the use of the ‘purchase method’ for all business acquisitions. FRS 6 Acquisitions and mergers, however, also permits the use of ‘merger accounting’ where specified criteria and should only be adopted for business combinations that are not acquisitions in substance, but instead the creation of a new entity where no party is dominant. Associates and joint ventures FRS 9 Associates and joint ventures requires joint ventures to be accounted for using the gross equity method whilst associates are accounted for under the equity method. The FRSME only permits, the equity method. Specialised activities The FRSME provides specific guidance on the accounting treatment of three specialised activities - agricultural assets, extractive industries and service concessions. Under UK standards there are no rules on the first two topics but in service concessions, unlike Application Note F to FRS 5 on PFI, the public sector will never have a physical asset on their books but instead will record either an intangible asset or a receivable in their balance sheets. Conclusion The major change from UK reporting is the huge reduction in disclosure in that there are only 300 maximum possible disclosures compared to 3,000 plus in UK Gaap. There will be teething problems particularly in the year of transition when two sets of financial statements will be required (last UK accounts reconciled to FRSME accounts) but overall there are not major differences between UK Gaap and the FRSME and the benefits long term will certainly exceed the initial costs of implementation. It will be later this year before the final standard is published and there are still likely to be further changes before the final product is published. NETWORK NEWS
Northern Ireland annual awards
From l-r: Sir George Quigley, Chairman of Short Brothers plc; Patrick Barr, Chairman of Chartered Institute of Management Accountants (CIMA); and Bombardier Aerospace employee, Amy Munroe pictured at the CIMA Northern Ireland annual awards dinner at Belfast City Hall. Bombardier Aerospace was voted ‘Favourite employer’ for the second year running by CIMA’s members and students, and Amy Munroe won an award for top achiever in the CIMA Enterprise Strategy exam.
Accountancy trio, Andrew Hayes from Belfast, who works for Grafton Recruitment; Carolyn Black from Randalstown who works for Musgraves/SuperValu and Claire Palmer from South Belfast who works for the Clarion Hotel in Carrickfergus were presented with awards for achieving top marks in their final professional examination papers at the annual dinner of the Chartered Institute of Management Accountants (CIMA) held at Belfast City Hall.
14 NETWORK NEWS
Northern Ireland’s Harold Baird elected CIMA global president Harold Baird FCMA, management accounting and business adviser was elected president of the Chartered Institute of Management Accountants (CIMA) at its Annual General Meeting held at the Queen Elizabeth II Conference Centre, London. Mr Baird provides services to small-to-medium enterprises and not-for-profit organisations in Northern Ireland and is currently a director of the Methodist Publishing Company Limited and Belfast Activity Centre Limited. Formerly, he was senior corporate planning accountant with Northern Ireland Electricity plc which on privatisation became Viridian plc. He has been extensively involved in the CIMA member network and was elected to council in June 2001 to represent Northern Ireland. He was chairman of the members’ services committee from 2007 to 2009 and has also served on several other committees including the executive, international development and lifelong learning committees. Harold Baird, FCMA newly elected President CIMA
Official opening of CIMA Ireland’s head office CIMA Ireland will officially open its new head office at 5th floor, Block E, Iveagh Court, Harcourt Road, Dublin 2, on Friday 2 December 2011. All students and members are welcome to join the celebration of the new all island, CIMA Ireland office. The event will be an informal evening of celebration and details will be provided in due course.
NETWORK NETWORK NEWS NEWS 15
Member events November and December 2011
Cork and Kerry 2012 economic outlook Tuesday 29 November 2012 5.45pm Maryborough House Hotel, Douglas, Cork
Dublin and district Lean business and Enterprise Ireland supports Tuesday 8 November 2011 CIMA Ireland, 5th floor, Block E, Iveagh Court, Harcourt Road, Dublin 2 6pm-8.30pm Dublin and district annual ball Saturday 12 November Westbury Hotel, Grafton Street, Dublin 2 Champagne reception 7pm Practical guide to the most common FRSâ€™s Thursday 24 November 2011 CIMA Ireland, 5th floor, Block E, Iveagh Court, Harcourt Road, Dublin 2 6pm-8.30pm
Mid West Cloud computing and your business Tuesday 15 November 2011 6.30pm registration Strand Hotel, Limerick
Northern Ireland Clarity and impact - how to present numbers Thursday 17 November 6pm registration Holiday Inn, Belfast City For more details on these events and to book your place, please visit the member events page on www.cimaireland.com or email firstname.lastname@example.org
16 NETWORK NEWS
West of Ireland How to apply for fellowship Friday 4 November 2011 6.30pm refreshments, 7pm presentation Meyrick Hotel, Galway
October - November 2011
Fri 28 Oct
P2: Performance Management - day 1
Jury's Inn, Belfast
Sat 29 Oct
P2: Performance Management - day 2
Jury's Inn, Belfast
Sat 29 Oct
E3: Enterprise Strategy - day 1
Jury's Inn, Belfast
Sun 30 Oct
E3: Enterprise Strategy - day 2
Jury's Inn, Belfast
Mon 31 Oct
P2: CMGA Revision - day 2
CIMA Office, Dublin
F2: CMGA Revision - day 2
CIMA Ireland office, Dublin
Wed 2 Nov
E2: CMGA Revision - day 2
CIMA Ireland office, Dublin
Sat 5 Nov
T4: TopCIMA - day 1
The Strand, Limerick
Sun 6 Nov
T4: TopCIMA - day 2
The Strand, Limerick
Sun 6 Nov
P3: Performance Strategy - day 1
Jury's Inn, Belfast
Mon 7 Nov
P3: Performance Strategy - day 2
Jury's Inn, Belfast
Fri 11 Nov
F3: Financial Strategy - day 1
Jury's Inn, Belfast
Sat 12 Nov
F3: Financial Strategy - day 2
Jury's Inn, Belfast
Sat 12 Nov
F2: Financial Management - day 1
Maryborough Hotel, Cork
Sun 13 Nov
F2: Financial Management - day 2
Maryborough Hotel, Cork
Other dates to note 22,23,24 November 2011 - Examinations 22 November 2011 - TalkBack opens 9 December 2011 - TalkBack closes
‘like’ the CIMA Ireland Facebook page to keep up to date with student and member news and events, as well as job opportunities.
NETWORK NEWS 17
American Institute of Certified Public Accountants (AICPA) and Chartered Institute of Management Accountants agree to offer new CGMA designation
New AICPA-CIMA designation - Chartered Global Management Accountant - to advance knowledge and practice of management accounting worldwide
The governing bodies of the American Institute of Certified Public Accountants and the Chartered Institute of Management Accountants, headquartered in London, earlier this year announced the creation of a new professional designation, the Chartered Global Management Accountant (CGMA), that will be a worldwide standard of professional excellence in management accounting. With approval now given by the AICPA and CIMA councils, the two accounting bodies will create the new CGMA designation to give management accountancy a higher profile in the United States and promote the professional development of management accountants across the globe. Backing the new CGMA designation will be an AICPA-CIMA joint venture with international resources and experience in management accounting, business and cultural knowledge. CIMA is the largest professional body in the world focused exclusively on management accounting and the AICPA is the world’s largest professional accounting organisation with members in a wide range of accounting and financial executive roles. Together, the new venture will cover more than 550,000 members and students worldwide.
18 NETWORK NEWS
The new AICPA and CIMA joint venture will promote and establish the CGMA as the preeminent, globally recognised management accounting designation. The joint venture will combine the strength of the AICPA in North America with CIMA’s presence in Europe, the Middle East, Africa, Asia and elsewhere. It is proposed that the new CGMA letters will be issued to members early in 2012. AICPA voting members with at least three years working in management accounting or a financial management role would qualify for an accelerated route to obtaining the new designation. Those holding the new designation will commit to a programme of developing and maintaining competency in management accounting as well as leadership and strategy. This knowledge base will be derived from an expert-panel assessment of skills and competencies needed to succeed in various career paths in management accounting.
CIMA members, all of whom hold either an ACMA or FCMA, will be entitled to use the letters ACMA CGMA or FCMA CGMA if they wish to. The new CGMA will be issued by the AICPA and CIMA through a license with the joint venture, with membership remaining with the existing organisations.
Huge interest in CIMA Diploma in Islamic Finance qualification
The newly launched CIMA Diploma in Islamic Finance (CDIF) got off to a flying start attracting forty nine candidates in two separate strands representing executives from industries/sectors as diverse as aviation, accounting, advisory, banking, FDIs, legal, manufacturing, regulation and the public service. Eighteen solicitors are participating under the Law Society Finuas Network Scheme, all of whom passed the first module Islamic Commercial Finance whilst achieving exceptionally high scores. The CDIF provides a timely opportunity to up-skill in this area of strategic importance and growth for Ireland. The introduction of the CDIF has attracted enormous interest both as the first such qualification to be introduced by a professional body in Ireland and as being particularly relevant given that the Irish government is positioning the IFSC as a Western hub for the provision of wholesale Islamic finance services.
The CDIF is the first global qualification of its kind to be created by a professional chartered accountancy institute working in conjunction with an advisory group of Shari’ah scholars and academics. In developing the CDIF, CIMA has worked closely with the International Institute of Islamic Finance Inc. to provide a relevant and highly applicable qualification. The CDIF is comprised of four modules – Islamic Commercial Law; Islamic Banking and Takaful; Islamic Capital Markets and Instruments; and Accounting for Islamic Financial Institutions. Delivery of the CDIF is via a ‘blended tuition’ offering combining access to online and hard copy study material; a web based, tutor monitored ‘CDIF discussion forum’; and attendance at four revision seminars. You can check out details of the CDIF at www.cimaireland.com or alternatively please contact CIMA Ireland’s office by calling +353 (0)1 6430400 or email email@example.com
NETWORK NEWS 19
Paula Roberts Finance Manager Ireland West Airport
The role of the management accountant is primarily focused on management skills and strategic input according to Paula Roberts FCMA. Paula, who is part of the senior management team at Ireland West Airport, has the unique distinction of being the only FCMA accredited CIMA member in the 2010 intake. Paula sees the work of the management accountant as extending beyond a function of finance to a much broader and indepth role in terms of impact and influence on the business. ‘Twenty years ago the role of the management accountant in an organisation was purely finance but today, as organisations have evolved with flatter structures, more management skills and strategic thinking is required. Often, like in my own current role, the management accountant is part of the senior management team and is required to get involved in all decisions relating to the company including operational, HR and decisions relating to the strategic direction of the company. The CIMA syllabus provides you with the knowledge and skills to be flexible and to play a vital role in this strategic process’ states Paula. Paula chose to study CIMA as the syllabus delivers a qualification that can be applied to all industry types and it is recognised worldwide. ‘The CIMA syllabus is so in depth it ensures all financial topics are covered. It includes basic skills such as cash flow and working capital management right up to strategic skills such as valuations and risk and control strategy.
20 NETWORK NEWS
The T4 paper which is the final paper includes an element which is present in a real life working situation and this is prioritising and analysing different problem areas. Of all the CIMA papers I found this paper to be the most practical and involved putting to use all the skills learned in previous papers. It combined good accounting ability with management and decision making skills and this is what is required of the accountant in today’s working environment’, she states. From Foxford in Co. Mayo, Paula, after qualifying with a diploma in business studies from Sligo IT started her career in London at a time when there were few opportunities in the West of Ireland. Working in the UK with a number of multinational businesses Paula gained invaluable experience and promotion over 12 years. ‘The experience I gained was a great foundation for my future career as I learned all aspects of the accounting function including, in my last firm, as a key member of acquisitions’ comments Paula. Paula returned to Ireland in 2003 and took up a position with Ireland West Airport which has, in turn, played a pivotal in generating business and job opportunities in the region. Ironically some of the challenges that led Paula to leave Ireland are the same challenges she has had to manage in her current role albeit from the perspective of the company’s finance manager. ‘Like all other companies, the recession impacted Ireland West Airport with decreased passenger traffic and turnover. In order to offset this reduction a full review of all costs was necessary. This process included tendering top costs and introducing strict purchasing policies and procedures. It also required the cooperation of all staff
‘...the management accountant is part of the senior management team and is required to get involved in all decisions relating to the company including operational, HR and decisions relating to the strategic direction of the company.’
and as a result Ireland West Airport Knock reduced its cost base by over 20%’, she states. In common with many CIMA members Paula finds ‘the best thing about my job is the variety of decision making. I am conscious that a lot of employees view the role as the cost cutter and although this is a vital part of the job, the finance function also plays a key role in decisions relating to the future growth and development of the company. As a senior manager I work with the managing director, and the HR and operational manager on all decisions relating to the future of the company. Airports and airlines are very volatile and sometimes decisions have to be made urgently and this is both a test to my financial and management skills. Working as part of a small management team ensures I get to see the bigger picture and have a broader understanding of the organisation and the vital role each department/ function plays in the company’s success’. When I joined the airport in 2003 passenger numbers were just over 200k and currently, despite the recession, the airport is forecasting to have a record year with passenger numbers expected to reach 640k. This is due to an increased route network of over twenty five destinations to the UK and Europe.
change in order to adapt to changes in the environment and it is important as accountants and managers that we ensure our organisations are compliant with regulatory changes and also that we can identify opportunities by being aware of what is happening in the external environment’, states Paula. Concluding Paula says that having completed the CIMA qualification herself, she would support and recommend it as a suitable qualification for any finance staff seeking a relevant qualification. ‘The CIMA qualification has provided me with the skills and knowledge to carry out my role with confidence and effectiveness. CIMA members add value to our business through the in depth knowledge and tools achieved through their CIMA studies and the practicality of the qualification. From a practical perspective I have found the support from the CIMA Dublin office invaluable throughout my studies and through the membership application process’ she concludes.
In the context of a volatile economic landscape both globally and locally, CIMA membership has helped Paula to learn and apply new skills. ‘CIMA ensures that their members are kept up to date with changes in accounting regulation and through ensuring its members complete a CPD to keep their skills updated. Keeping your qualification up to date is vital. Accountancy regulations
NETWORK NEWS 21
CIMA MY JOBS With demand for both part and fully qualified CIMA management accountants on the increase, top employers are turning to CIMA MY JOBS for their candidate searches. Whether you are in the market for a new job or looking for graduate positions, log on to CIMA MY JOBS.
For more details, please contact firstname.lastname@example.org or phone +353 (0)1 6430400 www.cimaglobal.com/myjobs
You can check out opportunities here in Ireland and globally by sector, position, salary and location. Upload your CV to CIMA MY JOBS where you can regularly update your details and are first in line for the best opportunities most relevant to you. Alternatively If you or your company are looking to recruit a CIMA part or fully qualified member, there are many advertising opportunities to choose from.
Scan to go to CIMA MY JOBS homepage
CIMA Ireland website and Facebook The CIMA Ireland website has undergone some recent developments to its look and layout.
CIMAachieve is the study resource area for students in
Ireland, and is where you can find past exam papers and guides, details of the CIMA mentoring scheme, student calendar, past Velocity emagazines, and more.
The ‘members’ link is where members will find all relevant information such as upcoming events throughout Ireland, members in practice information, details of member benefits, news and more. A new webpage for technical articles is coming soon, and will be in the members area. Make sure to visit the CIMA Ireland website regularly for any updates or new initiatives introduced.
Scan to go to CIMA Ireland facebook
22 NETWORK NEWS
Also, don’t forget to ‘like’ the CIMA Ireland Facebook page to keep up to date with student and member news and events, as well as job opportunities.
Get headhunted today! Upload your CV to CIMA MY JOBS Get headhunted today! Let us do the hard work for you as we can get your Upload yourYouCV tochoose CIMA MY JOBS CV in front of employers. can even to hide your CV from specific employers if you wish. Let us do the hard work for you as we can get your CV in front of employers. You can even choose to CIMA MY JOBS quick search hide your CV from specific employers if you wish. Key features Career advancement
CIMA MY JOBS quick search Advanced search Key features
Upload your CV Career advancement Take the hassle out of job seeking and let Advanced search employers find you by adding yourSEARCH latest CV. Upload CV alerts by email Registeryour for job Take the personalised hassle out of jobs job seeking Receive by emailand withletthe employers find you by adding your latest CV. latest jobs that match your needs. Register for search job alerts by email Simpler job Receive jobs by more email relevant with the Find the personalised right job for you with latest jobs that match your needs. search results and apply in a few clicks. Simpler job search Salary surveys and career advice Find for you with relevant Find the out right what job youâ€™re worth bymore accessing our search results and apply in a few clicks. global salary surveys. Salary surveys and career advice Find out what youâ€™re worth by accessing our global salary surveys.
New intake of MSc students 2011 saw the second intake of students for the MSc in Strategic Management Accounting delivered by UCD Michael Smurfit Graduate Business School, one of Europeâ€™s leading business schools. The MSc in Strategic Management Accounting, which is closely aligned with the CIMA professional qualification, provides graduates with a distinct competitive edge that will stand to them throughout their business career as well as opening up opportunities. In addition the MSc provides a fast track to completing the professional qualification of Associate of the Chartered Institute of Management Accountants (ACMA) with graduates exempt from all CIMA exams except for T4. Current programme participants are employed in a variety of positions, in organisations as diverse as: Aer Lingus / Allianz (Darta Life) / Allied Irish Banks / Certus / Connemara Seafoods Deloitte / Delph Ltd. / FFA Chartered Accountants / Health Service Executive Intel / Microsoft / Oracle / PricewaterhouseCoopers / Procter & Gamble / Teleflex / Medical Europe / WDA Chartered Accountants / Xerox
Pictured at the orientation afternoon for the 2011 below are: Front row (L-R): Christoph Drechsler, Academic Director, MSc in Strategic Management Accounting, Jill McGrath, Nusye McCommish-Vissers, Melania Corvi and Patrick Barr, CIMA Ireland Chairman Middle Row: Thomas Griffin, Jonathan Ruddock, Rebecca Uzell, Sinead McHale, Karin Webber and Denis McCarthy, CIMA Ireland Director. Back Row: Trevor Larkin, Eoin Kavanagh, Darragh Nugent, Ziwen Qu, Qi Xu and Na Ning.