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TECHNICAL MATTERS Accounting for goodwill

This issue Accounting for goodwill The OFR Equity investment CPM

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Why are firms willing to pay so much for takeovers when the goodwill burden is so onerous? Kenneth Dogra examines the asset that dare not speak its name.

What is goodwill? Under international financial reporting standards it’s defined as the excess of the cost of acquisition over a group’s interest in the fair value of the identifiable assets and liabilities of a subsidiary, associate or jointly controlled entity at the date of acquisition. Goodwill is recognised as an asset. Annual impairment tests must be conducted and any loss in value of the assets acquired is written off via the profit and loss account. Accounting for goodwill changed from an amortisation method to an impairment-only approach on January 1, 2005, when IAS22 was superseded by IFRS3. Under US Gaap, the definition of goodwill is the same – ie, it’s the excess of the purchase price over the fair value of the net identifiable assets acquired – although SFAS142 changed accounting for goodwill from an amortisation method to an impairment-only approach as long ago as July 1, 2001. A number of international groups

Illustration: Julian Mosedale

changed to using US Gaap after this date to avoid the negative effect of having to amortise goodwill. This move improved their results considerably. The French have an appropriate term for when the purchase price exceeds the fair-value net assets: écart d’acquisition, or difference on acquisition. All this leads us to the conclusion that, when a business takes over another entity, it needs to find a method by which it can avoid reducing the net assets of the group by the excess over the fair-value net assets of the firm it has purchased. So we call this difference an asset that’s not really identifiable. Acquisitions are complex, high-risk processes. Unless there is a logic to a

The prices Vivendi paid exceeded fair-value net assets by astronomical sums, resulting in the charging of huge goodwill amortisation amounts

takeover that leads to a planned approach to growth, its chances of failure are high. For financial managers who have been involved in acquisitions, the crucial point in all negotiations is price. Sellers tend to have an inflated opinion of their companies and seek high prices, especially when the world economy is booming. But, with a planned approach to growth, buyers can identify certain synergies that look interesting on paper and carry a certain value. They can use a number of financial models to calculate the value of a takeover target. The most common technique used is the discounted cash flow method. This relies on the input of realistic cash flow forecasts, discounted to give net present value, for a period in the future. The consequent numbers game fuels the negotiations – and the urge to win. In larger transactions involving quoted companies a second bidder may appear and push up the offer price, and the board of the target company has a duty to get the best price for its shareholders. Recent examples include Vivendi International’s acquisitions in the telecoms industry, where the prices it paid exceeded fair-value net assets by astronomical sums, resulting in the charging of huge goodwill amortisation amounts to the profit and loss account. Other companies are more aware of the goodwill burden and, much to their credit, walk away from a transaction when the price is too high. A striking example of this came in 2003 with the bidding war to acquire Centerpulse, a Swiss manufacturer of medical prosthetics. When the transaction price rose to a ridiculous level, UK healthcare company Smith & Nephew withdrew and let its US competitor, Zimmer FIN A NCIA L May 2005 M A N A GEM EN T


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Accounting for goodwill CASE STUDY: ZIMMER HOLDINGS’ ACQUISITION OF CENTERPULSE In October 2003 US company Zimmer Holdings acquired Centerpulse, a Swiss-based manufacturer of orthopaedic medical devices. The attractions for Zimmer were as follows: ■ Becoming the biggest orthopaedics company in the world. ■ Fulfilling key priorities by strengthening its European market position and entering the rapidly growing market for spinal devices. ■ Adding established products and a more comprehensive research effort in orthobiologics to its portfolio. ■ Increasing its presence in the reconstructive dental market. When the deal was signed on October 2, Zimmer paid a consideration of $3,453.4m. The sum comprised a purchase consideration of $3,410.9m plus acquisition costs of $42.5m. This was paid for in cash ($1,187.1m) and shares ($2,223.8m). The fair-value net assets at October 2, 2003 were as follows: $m Current assets 796.8 Property, plant and equipment 169.9 Trademarks and trade names 243.0 Intangible assets subject to amortisation: Core technology 116.0 Developed technology 309.0 Trademarks and trade names 31.0 Customer relationships 34.0 In-process research and development 11.2 Deferred taxes 537.4 Other assets 83.9 Less liabilities: Short-term debt 306.3 Deferred taxes 250.3 Other current liabilities 274.6 Integration liability 75.7 Long-term liabilities 176.6 Net assets 1,248.7 The key elements of the purchase consideration can, therefore, be analysed as follows: Net assets acquired Acquisition costs Excess Total purchase consideration

$1,248.7m $42.5m $2,162.2m $3,453.4m

It appears that included under the intangible assets heading is what could be classified as a



deferred expenditure in respect of R&D and marketing costs of $490.0m. Would this result in impairment costs in future? The goodwill would be $2,162.2m + $42.5m = $2,204.7m, representing 63.8 per cent of the purchase consideration. It’s no wonder that Smith & Nephew, Zimmer’s rival bidder, dropped out. Costing an arm and a leg: did Zimmer pay over the odds in its bid to become the world’s biggest orthopaedics company?

It’s interesting to examine Zimmer’s 2003 annual report to see its operating ratios before and after the acquisition (profitability ratios exclude adjustments in 2003 concerning the acquisition):

Gross profit/sales Operating profit/sales Net profit/sales Days in receivables Days in suppliers Debt/equity* Free cash flow/sales Break-even % of sales Break-even of sales

2003 72.8% 24.3% 20% 93.4 days 90.2 days 130.2% 16.8% 61.9 $1,176m

2002 74.9% 29.2% 18.8% 57.1 days 63.3 days 42.3% 13.4% 62.1 $853m

Although there are improvements in some areas, do they justify a purchase price of $3.4bn? Zimmer’s future results will provide the answer. *Excluding goodwill.

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Holdings, complete the purchase. See the case study on the opposite page to find out whether it was a case of the old IAS versus US Gaap or simply good business sense. Many groups’ profits after tax and earnings per share have been affected by excessive goodwill write-offs. As a result, they are reporting operating profit before goodwill amortisation and impairment. It has been suggested that investors and analysts look at cash flow, where there is no goodwill amortisation effect. But there is still a strain on the financial resources of a group where debt has to be repaid if it borrowed for acquisitions and increased interest expense, irrespective of the accounting engineering it has introduced. The goodwill factor consists of the following characteristics: ■ An asset on the balance sheet that cannot be identified as such (which is why it’s called an intangible). ■ Transaction costs lumped in with goodwill – and anything else, if you can get away with it. ■ Amortisation and impairment charges to the profit and loss account. ■ In a liquidation: no value. Consider the example of a typically overpriced acquisition in panel 1. Assuming a borrowing rate of 3 per cent, the purchaser will incur an extra £27m in interest payments in the first year. On the assumption that the loan is to be repaid over seven years, a further £128.7m will need to be found, hopefully out of cash flow. This type of situation can lead to corporate manipulation in respect of financial reporting when profits and cash flow are insufficient. In order to curb such overspending companies could consider changing how

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PANEL 1 A TYPICALLY OVERPRICED ACQUISITION Fair-value net assets Transaction costs Difference Purchase price Fair-value net assets Goodwill Debt

Transaction (£m) 400.5 89.5 410.0 900.0

PANEL 2 A NEW APPROACH TO ACQUISITION COSTS Sales Gross profit Operating costs Operating profit Non-operating costs Financial expense net Acquisition costs (detail given in note to the accounts) Pre-tax profit Taxation Profit after tax Note to the accounts Acquisition costs Difference between purchase price and fair value of the net assets of X Ltd Transaction costs Total

they account for acquisitions by writing off any difference between the purchase price and fair-value net assets together with transaction costs to a special section in the profit and loss account

Balance sheet (£m)

400.5 499.5 900.0

under the heading “Acquisition costs”. This could be stated as in panel 2. Such an approach would make boards more accountable for the decisions they make when expanding their companies by acquisition. Goodwill at the date of the change in the accounting treatment for acquisitions could be written off to reserves. Similarly, the surplus against net assets on a flotation could be netted off against the share premium generated and not left on the balance sheet as goodwill. The standard setters and the accounting profession have acquiesced to the hue and cry of industry and the financial community in the past. Isn’t it time that we brought some reality into financial reporting for investors? F M

Kenneth Dogra FCMA is managing partner at the Amerac Consultancy ( He is also the author of Reflections for the Unsuspecting Shareholder, which can be obtained, price £15, from Amerac Publications, c/o The Better Book Company, Warblington, Havant, Hants PO9 2XH. FIN A NCIA L May 2005 M A N A GEM EN T


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The operating and financial review The mandatory OFR creates a number of new responsibilities – and conundrums – for directors. Louise Ross considers whether it’s revolutionary or evolutionary.

The final OFR standard from the Accounting Standards Board (ASB) is still being prepared as Financial Management goes to press. But the draft standard, issued in November 2004, laid out the key principles that the OFR should be comprehensive (although it shouldn’t be expected to cover all possible matters), and that boards should be required to focus on “matters that are relevant to the interests of investors”. The ASB has supplemented these principles with a statement that directors would need to consider “key issues”. CIMA argued in its response to the draft standard that the combination of all these terms did not adequately convey the concept that the directors should focus on matters material to investors. The institute’s full response can be found under “Resources” in the consultations database at

How big a change is the mandatory OFR to the various groups involved? The extent of the change depends on the preparer’s starting point. The ASB acknowledges that best practice advanced considerably between 1993, when the original OFR guidance was issued, and 2003, when it was revised. But the consensus is that the mandatory

requirements will not stretch companies that currently produce good voluntary OFRs. For examples of good practice, look at Barclays, Co-op Financial Services or Unilever – all of which were identified by PricewaterhouseCoopers in the 2005 edition of Good Practices in Corporate Reporting. CIMA argues that the information collected for the OFR should be a natural extension of the management information presented to the board for decision-making. If this is not the case,

The information for the OFR should be a natural extension of the management information presented to the board for decision-making the information required for the OFR will highlight these deficiencies. This will surely raise the standard of information used by boards to manage companies and create value for investors. Directors may also be wary about making forward-looking statements with the confidence and clarity required in a good OFR. There isn’t yet a “safe harbour” provision protecting them from legal liability for statements, although the government’s guidance on

THE BACKGROUND The operating and financial review is a legal requirement for British quoted companies for financial years beginning on or after April 1, 2005. What’s special about the OFR is that, unlike traditional financial reporting, it requires the board of directors to analyse both the current performance and the future development of the business, and also to report non-financial information such as environmental, social and employee matters. The objective behind the mandatory requirement is that companies will become more transparent, which in turn helps investors to make more informed decisions.



forward-looking information advises readers to “treat some or all of these elements with caution”. The mandatory OFR also imposes new responsibilities on boards. There will be a new criminal offence of “knowingly or recklessly approving an OFR that does not comply with the relevant provisions of the act” under which directors risk unlimited fines. This parallels the offence of approving defective accounts. Directors may also be required to revise OFRs for omissions (from Companies Act requirements); for non-compliance with the reporting standard; for material misstatements; or for publishing an OFR that “contains an opinion which no reasonable board could have formed if it had followed a proper process of collecting and evaluating evidence”. (Note that the Financial Reporting Review Panel’s enforcement duties do not start until the mandatory OFR has been in effect for one year – ie, for financial years starting on or after April 1, 2006.) Auditors also have new duties, because they are required to review the mandatory OFR. The original intention was that they would assess whether directors had used “due and careful enquiry” in preparing an OFR. But respondents to the government consultation – including CIMA – advised that this responsibility was unduly onerous and would subject the OFR to a higher level of assurance than the rest of the accounts, so the Department of Trade and Industry agreed to compromise. Auditors are now required to state their opinion on whether the information in the OFR is consistent with the accounts, and whether any matters that have come to their attention are inconsistent with

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The operating and financial review


information in the OFR. This is not a radical new demand; it merely extends their traditional requirement to be alert to any information that doesn’t fit. The remaining people to be affected are those for whom the OFR is intended: the shareholders. Arguably, institutional investors can already access most of the information in the mandatory OFR, either because of their ability to draw some of that information by analysing the financial statements, or because of their closer relationship with the chief executive – a significant proportion of whose time is apparently taken up with improving investor relations. A mandatory OFR will have a greater impact on small investors – if they ever receive it. Most small investors choose to receive the summary financial statements (SFS) rather than the full set of accounts. The OFR is a stand-alone statement in the annual report and so is automatically made available only to the recipients of the full annual report and accounts. Companies that offer SFS must publish the OFR on their website, tell shareholders that it’s there and offer a hard copy to those who request one. This modified distribution was a concession to objections made to the government by CIMA and others about the significant estimated cost of distributing an OFR to all investors – hundreds of thousands of pounds for firms with many shareholders.

Thoughts on key performance indicators The mandatory OFR requires directors to use key performance indicators (KPIs) to assess and report progress against stated objectives. The main challenges for companies in this area will be to decide what to report and to balance the following competing OFR principles: the



■ The government’s response to the public consultation includes the rationale behind the concessions it made on distribution of OFRs, the revised scope for auditors and estimates of the extra assurance costs. ■ DTI draft guidance for directors includes information on how to interpret the requirements of the OFR, how it will affect directors and stakeholders, how it will be examined by auditors and how it will be enforced. ■ ASB implementation guidance. This will be included in reporting standard 1 and will suggest what disclosures will be required to satisfy the OFR, specifically in relation to KPIs. Reporting standard 1 should be available by June 1. ■ Auditors’ responsibilities in relation to the OFR. Guidance for external auditors examining OFR disclosures will be prepared as part of the 2005-06 work programme of the Auditing Practices Board. ■ The Financial Reporting Review Panel’s enforcement role. The Financial Reporting Review Panel is currently consulting on its operating procedures. documents/Revised%20Operating%20Procedures.pdf. ■ David Larcker’s presentation, “Performance measures: insights and challenges”. document_broker.htm?filename=Larcker_Presentation_2004.ppt. ■ CIMA’s response to the ASB exposure draft for the OFR reporting standard can be found under “Resources” on the consultations database at

requirement to focus on matters relevant to the interests of investors, yet be comprehensive; and the requirement to be balanced and neutral, yet to focus on trends and factors that affect the performance of the business. The right to choose KPIs is doubleedged. You can choose the measures that reflect the mechanics of your business, but you may be guilty of perceived or actual bias. You can change measures or recalibrate existing measures to reflect new risks, trends and opportunities, but you sacrifice the chance to compare performance over time. You can tailor a suite of measures to your business, which tells a powerful story, but users may then struggle to compare you with your peers. Some of the challenges will be resolved gradually. The development of narrative reporting will be evolutionary – consider KPIs in the context of financial reporting standards, which took many years to develop and are still being improved. David Larcker, CIMA’s visiting professor in 2004, suggested that “a few vital KPIs are better than a laundry list”. He acknowledged that the lack of an agreed approach meant that measuring non-financials accurately was

“damn hard”, but argued that too few companies were identifying the right drivers. Instead, they were unthinkingly applying templates, frameworks or models promoted by consultants without tailoring them to reflect their own mechanics. He said that few identified drivers that connected to longterm value, citing research showing that most firms failed to relate performance measures to strategy or to validate the relationship between non-financial measures and future financial results. “Please excuse such a long letter; I didn’t have time to write a short one.” This quote, attributed to Blaise Pascal, Napoleon Bonaparte and Mark Twain, reminds us that the OFR should be as much about discrimination as communication. Both the regulation and the standard emphasise that the OFR should be concise. The trend towards long annual reports is regrettable, not only because of the costs of publication and distribution, but also because such a mass of information, audited and examined to different levels, can obscure important messages. F M

Louise Ross is an accounting specialist in CIMA’s technical services department.

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Equity investment Stock market investors have a wide range of forecasting tools to choose from, but even the most accurate method has its limitations, as Michael Goddard explains.

Is it possible to predict the stock market accurately? If it is, surely you could make a fortune over a period of years. Let’s look at a range of methods of anticipating turning points in a market and whether they work or not. Despite the apparent absurdity of astrology, a surprisingly large number of intelligent and well-educated investors take it into account when making investment decisions. Unsurprisingly, there’s no record of anyone making a substantial amount of money using this approach. A slightly less controversial method is the wave theory developed by Ralph Elliott in the 1930s. Its guiding principle is that the market moves in waves of different lengths from 70 years or longer, down to a few days, hours and minutes. The patterns often conform to specific numerical sequences and percentages, such as Fibonacci constants. According to the FT, some fans of the Elliott wave theory reckon that the market peak in 2000 was the top of a five-wave pattern that began at the market’s low point in 1932, meaning that a massive setback is imminent. It will, they believe, take the Dow Jones industrial average down to about the 1,000 mark and hit the FTSE 100 by a comparable amount. Apparently, this is likely to happen in a bear market that could last for a decade or more. The only problem is that they have been predicting disaster for years. Is it going to be any different this time? It has been said that chartists usually have dirty raincoats and large overdrafts, but some of them have actually made a lot of money. The technique must, therefore, have a certain amount of credibility. Chartists believe that a chart showing the history of a share price reflects the hopes and fears of all




investors and is based on the one indisputable factor: how a share has performed in the market. The market’s perception of the share is a constantly changing illusion, according to the chartists, so it’s more important to follow trends than to try to work out a company’s likely earnings per share several years ahead. Jim Slater, a legendarily successful stock market investor, states in his book The Zulu Principle that he uses charts as one tool in a whole kit. They either give him further confirmation that he is proceeding along the right lines or provide a warning signal, sometimes well in advance of any deterioration in the fundamentals. A more anticipatory tool is the Coppock indicator, which has given exceptional results. In the depths of a bear market you should always look out for an upturn in the Coppock curve, which is normally a strong buy signal. It was devised by Edwin Coppock in the

1960s and based on a mechanical system known as the long-term buying guide. Coppock, a devout Christian, was asked to work out a long-term low-risk buy signal for his church’s funds. The administrators wanted to know when to step up purchases and when to stand aside. He asked the church ministers how long they thought it generally took for the human mind to adjust to bereavement, divorce, illness, unemployment, financial loss, relocation and retirement – the greatest stresses it has to handle. He adopted their answer of 11 to 14 months as a yardstick. “Do major long-term buying of strong stocks when the curve first turns upwards from below the zero line,” he wrote in his 1962 paper, Emotions Make Prices. But he added: “The technique is of no value whatever to an in-and-out trader; it is a technique for long-term investors – their low-risk buying guide.” The indicator is not a sign of a trend reversal, but it shows that the risk

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factor in the market is low and usually heralds a sustained advance. If you apply it to the Dow Jones industrial average from 1919, it gives only one false signal (1930). Brian Marber, a leading chartist, wrote in the FT that, although Coppock used his indicator only on the Dow, its principles make it applicable to all markets, although it doesn’t seem to work on foreign exchange. If applied to the London markets since 1940, for example, it also gives only one false signal (1948). The technique does not give a sell signal – Coppock would become incensed if his followers tried to use a trend-line downturn as one. So how is the Coppock curve or trend line derived? ■ Compare the Dow’s end-month level with those prevailing 11 and 14 months earlier. ■ Express the differences as percentages. ■ Combine them and multiply by ten. ■ Repeat this exercise the following month, multiplying the previous month’s figure by nine. In the third month, multiply by eight and so on down to one. After ten months you obtain a weighted average of the previous 22 months’ data. A version of this calculation can be found, for all the world’s major stock markets, in the first issue of Investors Chronicle of every month. This uses a rolling 12-month average rather than the 11- and 14month figures that Coppock devised. The general outlook for buying more shares is usually unattractive when a Coppock buy signal occurs, but history tells us to be guided by this signal rather than the outlook. The problem is that Coppock generates very few of these – only seven over the past 30 years. This is

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both a strength and weakness. It is a strength because a buy signal, when it comes, warrants serious consideration. It is a weakness – and one reason why Coppock is given little attention – because if it were our only guide we would die of boredom waiting for a buy signal. The Coppock indicator’s few false signals also give cause for concern. In 1948 it would have encouraged London investors to buy, but a 20 per cent decline in the FT 30 index was to follow. At least it took only four years for the market to recover in that case. The wrong message that Coppock would have given Dow investors in 1930 would have been much more serious. On November 13, 1929 the Dow crashed to

It has been said that chartists usually have dirty raincoats and large overdrafts, but some of them have actually made a lot of money its low for the year, losing 48 per cent of its value a mere ten weeks after it had peaked. Then came the so-called fools’ rally: in the five months after November 13, the index recovered half of the value it had lost. But in May 1930 the dreaded bear market was under way again and those caught in the rally knew they’d been duped. By the end of the year the market had plummeted 60 per cent from the peak of the rally. There were further downdraughts in 1931, but the final slaughter came a year later, when share prices plunged to depths visited half a century earlier. From September 1929 to June 1932 the Dow’s value fell by 89 per cent. Its peak of 381 points in 1929 would not be reached again for 26 years. The Dow’s

fall from its 1929 low to the 1932 low was 79 per cent. If the Coppock indicator had existed at the time, that would have been the approximate percentage loss suffered by its users. Most professional equity investors say it’s virtually impossible to predict the stock market. They advocate pound-cost averaging for the private investor – ie, putting a fixed sum every month into equities. This has the advantage of buying more shares when the stock market is low and fewer shares when the market is high. But, when the Coppock indicator starts rising while the numbers are still negative, the buying signal it gives will be correct more than 90 per cent of the time. When it comes to protecting your portfolio against future bear markets, Jim Slater’s advice is to have 100 per cent of your patient money invested if you feel bullish and 50 per cent if you feel bearish. When pruning your portfolio down from to 50 per cent, keep your more defensive stocks. This should happen naturally as you sell shares that fulfil your investment objectives. In early January 1975, at the bottom of a bear market, the FT 30 ordinary share index had fallen to 146 points, the lowest it had been since May 1954. The UK market price/earnings ratio was 3.8 with a dividend yield of 13.4 per cent. At the end of that month the Coppock indicator gave a buy signal that was to prove a stupendous money-making opportunity for long-term investors. If such an opportunity occurs again, let’s grasp it with both hands. F M

Michael Goddard is the former FD of Concorde Express Transport. Since his retirement he has become a journalist specialising in financial matters. FIN A NCIA L May 2005 M A N A GEM EN T


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Corporate performance management Enlightened companies will see the statutory operating and financial review not as a barrier to clear, but as a chance to get into a virtuous circle, writes Richard Barrett.

After a lull over the past few years, many organisations are upgrading their performance management systems to give them a better insight into future revenues and profitability. But there’s nothing like new legislation to focus the mind: UK-listed companies will for the first time be required to prepare statutory operating and financial reviews (OFRs) for financial years starting on or after April 1, 2005. The OFR is a narrative report intended to help shareholders and potential investors assess a company’s strategies and capacity for success in the future. Companies faced by new legislation often see it merely as an obstacle to overcome. This usually leads to short-term solutions, which might meet the basic statutory requirements but will fail to take advantage of the situation and the potential returns. Firms that make this mistake will incur the costs of compliance and reap none of the rewards. In 2003 specialist monitoring company GovernanceMetrics International found a strong link between investor-friendly governance practices and high shareholder returns. It’s not hard to see why this might be the case. Compliance requirements that favour greater transparency give all stakeholders more confidence. This leads to more investment and creates a virtuous circle that increases the company’s value. Of course, none of this comes without committing the necessary resources. In particular, the right information systems and controls need to be in place. The better solutions available from corporate performance management (CPM) vendors provide several features that help to satisfy the



requirements of the OFR legislation. Key among these is the ability to combine financial and non-financial information. An OFR can potentially report on many different areas. These include customer and market statistics, innovation, employee skills and (self-referentially) governance issues. Formal reporting on these topics will be new to some, but a company should ideally be managed using such measures – the drivers of its business – anyway. So, once again, there are tangible benefits to be gained from committing to the OFR.

Directors will be expected to exercise the same level of care in preparing the narrative report as for the financial accounts. Furthermore, the OFR, like the annual financial report, will be audited. The underlying systems must, therefore, provide transparency so that the report can be shown to be reliable and unbiased – and, indeed, so that the actual cost of the audit is lower. An effective CPM

system will provide this transparency, which should be seen as a benefit for managers, who can be confident in the information they are using to run the business. The OFR is intended to be forward-looking and to provide a view of the company’s prospects. The better CPM systems offer predictive functionality, with the ability to define rules that forecast performance. The advantage of having a system that can do this is that, once the predictive rules are defined, the results are demonstrably unbiased. The requirements of the OFR will force management accountants to go beyond their traditional domain of financial information and get to grips with both the external and internal drivers of financial performance. This will entail working alongside the marketing department to ensure reliable and robust measures of market size, growth and share, and developing an in-depth understanding of how the whole enterprise works. Although some companies will undoubtedly try to meet the minimum OFR requirements by using external consulting organisations to cobble something together, the companies destined to benefit the most are those that can provide credible, meaningful information to the satisfaction of investor groups. These successful companies will have CPM systems in place, but they won’t simply be using them to satisfy the OFR requirements. These systems will allow them to manage their businesses better and outperform their peers. F M

Richard Barrett is vice-president of global marketing at ALG Software.

Accounting for goodwill  

Why are firms willing to pay so much for takeovers when the goodwill burden is so onerous? In this article from Financial Management magazin...