Germany's Hypothekenbank in Essen licenses Fernbach IFRS software
24 November 2005 | 3110 views | 0
FERNBACH-Software, a supplier of Enterprise-wide Value and Risk Management solutions announced that its FlexFinance IFRS product has been chosen by Hypothekenbank in Essen AG (Essen Hyp) to implement accounting in information technology in accordance with International Financial Reporting Standards.
With total assets of approximately €87 billion, Essen Hyp is one of the leading mortgage banks in Germany having the competitive advantage for both public- sector lending and mortgage lending.
Since the beginning of 2005, far-reaching changes to the statutory requirements for European banks have come into force – including new accounting methods which have a considerable impact on current accounting practices. International Financial Reporting Standards (IFRS) have been binding since January 2005 for EU companies listed on the stock exchange and are increasingly accepted as industry standards within the global financial sector. More than 90 countries intend to implement or recognise IFRS when adapting national guidelines to international standards.
Essen Hyp currently prepares its monthly and annual financial statements exclusively for the consolidated balance sheet of their majority shareholder in accordance with IFRS, but required a robust solution that could streamline all of their associated processes and significantly shorten close times. FlexFinance, FERNBACH's award-winning solution, will fully automate the entire process while eliminating the necessity for manual intervention and thus removing the potential for error. Using an internet browser integrated within FlexFinance IFRS, Essen Hyp will have instant and fully transparent access to the balance sheet and P&L accounts, while also being able to track the entire audit trail by utilizing the strength of the drill-down functionality. For individual reports FlexFinance IFRS offers a centralized DataMart containing consolidated IFRS data from the banks differing data sources which offers the possibility of highly flexible and in-depth analysis as required.
The intuitive workflow incorporated into FlexFinance IFRS effortlessly guides users through the complex and difficult hedging process, while an early warning system automatically alerts users with critical effectiveness values which can be used for up to the minute, detailed monitoring. Preprocessing of IFRS within the delivery systems or adoption of these systems is not necessary when using FlexFinance IFRS as mapping is included within the software.
"After evaluating the choices available on the market we choose FERNBACH´s FlexFinance IFRS solution as this product works on the basis of deal-level parallel accounting and therefore offers a high degree of investment security when implementing IFRS," said Norbert Boddenberg, Executive Vice President and Head of the Accounting and Taxes Department of Essen Hyp.
FlexFinance IFRS includes the following components:
The Data Management Suite (DMS) imports deal data from the existing systems. The DMS provides splitting of financial instruments into units which can be valued and highly differentiated generation of all cash flows as the basis for the valuation of individual deals.
The Calculation Kernel (CK) determines the IFRS-compliant valuation of deals for the (hedge) fair value - if this valuation has not already been supplied from Front Arena - and at amortised cost. This also includes the comprehensive data set of accounting-relevant ratios (e.g. accrual/deferral).
The Hedge Manager supports the workflow-controlled hedging process from construction through documentation to effectiveness measurement and automatic resubmission.
The Accounting Generator creates the periodic and event-triggered accounting entries for the balance sheet and profit and loss account based on deals, payments and valuations. The Accounting Generator is delivered with comprehensive pre-configuration which was agreed with customers and auditors.