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Our treasury offering - EY

All eyes on corporate treasuryOur treasury offering SummaryThe evolving treasury function 1 Organization and governance 3 Tax and the treasury function 4 Financial risk management 5 Cash and liquidity management 6 Corporate funding 7 Financial instruments valuation and accounting 8 treasury technology 9 Assurance and control 10 Performance assessments 11 Contacts 131 Ernst & Young treasury managementA challenging contextThe demands on corporate treasury departments are subject to constant change with, for instance, an increasing requirement of shareholders for companies to demonstrate how financial resources and financial risks are managed. These requirements for increased transparency and control have led to a global trend toward centralization of treasury activities. In addition, treasurers need to cope with a growing complexity of financial instruments, ever more volatile financial markets and the introduction of new regulations and accounting practices.

Summary The evolving treasury function 1 Organization and governance 3 Tax and the treasury function 4 Financial risk management 5 Cash and liquidity management 6

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Transcription of Our treasury offering - EY

1 All eyes on corporate treasuryOur treasury offering SummaryThe evolving treasury function 1 Organization and governance 3 Tax and the treasury function 4 Financial risk management 5 Cash and liquidity management 6 Corporate funding 7 Financial instruments valuation and accounting 8 treasury technology 9 Assurance and control 10 Performance assessments 11 Contacts 131 Ernst & Young treasury managementA challenging contextThe demands on corporate treasury departments are subject to constant change with, for instance, an increasing requirement of shareholders for companies to demonstrate how financial resources and financial risks are managed. These requirements for increased transparency and control have led to a global trend toward centralization of treasury activities. In addition, treasurers need to cope with a growing complexity of financial instruments, ever more volatile financial markets and the introduction of new regulations and accounting practices.

2 For treasury , this means a need to update know-how continuously to ensure reduction of costs, minimize volatility, bring value to the company and ensure short and expansive lines of goals our missionWe will help you to define clearly the responsibilities of the treasury function and to engage further in supporting the business. We have the required know-how and expertise available for all the important topics of treasury (for example, cash and liquidity management, financial risk management, accounting, system utilization). In addition, we will confirm whether the internal control of the treasury function is in accordance with statutory requirements and market than ever, it is important to adopt an integrated holistic approach instead of pursuing temporary solutions for individual we can helpThe growing demands on the treasury function are driven to a large extent by the current market situation.

3 They are associated with a heightened awareness of management for operational and financial risks, focused on the following themes: Improvement of cash-forecasting quality and methodologies for liquidity management and financial planning Management of derivatives, market price and counterparty risks Accounting and valuation of all treasury transactionsIn parallel, there is continual pressure to improve the efficiency of, and control over, the treasury function. Ernst & Young provides a portfolio of services that cover the full scope of a treasury function. We have a knowledgeable team, with the right combination of treasury skills and experience to support your treasury through all types of challenges. To p icsOur primary treasury services cover the following areas: treasury organization and governance treasury performance assessments Financial risk management (interest, FX, credit and commodity risks) Cash and liquidity management, including cash forecasting Corporate funding and capital management treasury technology, including treasury management system (TMS) selection and implementation Valuation and accounting for financial instruments (IFRS and local GAAP) Advising on the tax aspects of the treasury function Audit, quality assurance and complianceYour benefits Integrated service offering Powerful, customized approach Rapid, sustainable knowledge transfer Solid process embedment Holistic perspective Profit from our global treasury network and multinational teamWhat next?

4 Self assessment using our proven analytical methodology Analysis of potential improvements, based on your current situation Individual approaches to address any weaknesses identified Quick check of accounting policies and hedge relationshipsWe are happy to discuss how we can help you drive your treasury function evolving treasury functionImplementationPlanningStrategyQu alityassuranceTreasurymanagementTreasury technologyCorporatefundingCash andliq uiditymanagementFinancial riskmanagementAssuranceand controlValuation andaccountingTax and the treasuryfunction Organizationand governance2 Ernst & Young treasury management3 Ernst & Young treasury managementOrganization and governanceChoosing the right organizationWith the increasing importance of treasury , companies must choose a robust and dynamic organizational structure.

5 In particular, a well thought-out strategic, forward-looking approach is essential. This begins with choosing the right operating model. In order to do this, the scope of activities that are covered by the treasury function and the degree of centralization must be determined. Does the treasury function execute only the most necessary activities such as liquidity management? If the treasury function is considered a core organizational process, does it cover the full range of services? This must be taken into account when designing the optimal hierarchical structure of the central and local treasury functions. Reorganization and transformationA reformulation of the organizational structure, processes and financial risk management is needed due to changing circumstances such as: Transactions (mergers, acquisitions, carve-outs, spin-offs) Reorganization projects (enterprise resource planning (ERP))How we can helpUsing a gap analysis of your current treasury structures compared with the requirements according to your strategic objectives, we make recommendations for choosing the right organization and optimizing the treasury function.

6 This leads to, inter alia, improved communication and reporting processes and identifies process duplication and work with you through the whole process, from definition of objectives to implementation of a new or revised organization of the governance structure and underlying state analysis Analyze the current state compared with leading practices and established control requirements Assess the systems and methodologies focusing on the identification of potential improvementsFuture state development Define the target organization given the objectives Identify leading practices that are both fit for purpose and focused on value optimization Define, update or standardize policies, processes and procedures for: Banking network (banking selection and rationalization) Cash management (pooling or netting) Short- and medium-term financing ( , factoring and securitization) Financial risk management (strategy optimization) treasury accounting Define and adjust key management indicators Select and implement TMS(s) Define roles and responsibilities, job descriptions and provide assistance toward recruitment and/or secondment placementImplementation support Project planning and management (objectives, resources, milestones)

7 Identify and implement quick wins Assist with planning and implementation of the new global structure rollout Knowledge transfer through workshops covering operations, accounting, finance, legal, tax services and information systems Interim staffing of operational or control functions (when allowed)Your benefits Realignment of the treasury function to meet current and future economic and regulatory requirements Realization of potential synergies and efficiencies by optimizing treasury processesImplementationPlanningStrategyQ ualityassuranceTreasurymanagementTreasur ytechnologyCorporatefundingCash andliq uiditymanagementFinancial riskmanagementAssuranceand controlValuation andaccountingTax and the treasuryfunction Organizationand governance4 Ernst & Young treasury managementYour benefits Compliance with relevant treasury tax legislation Centralization of treasury activities improving visibility and reducing treasury tax risk Managing tax costs on cash management structures Compliance with treasury transfer pricing requirements Effective hedge accounting from a tax perspectiveTreasury

8 TransactionsAlmost every treasury transaction requires consideration of the tax implications. The techniques and instruments used by a treasury function often give rise to complex accounting and tax issues, since the tax treatment sometimes depends on how a transaction is treated in the value of treasury transactions can also be significant ( , foreign exchange gains and losses) and significant tax exposures can arise on unhedged balances in the accounts. Given their complexity, treasury transactions are often scrutinized by tax authorities, so it is important that the tax issues are considered before a treasury transaction is questions and how we can helpSome of the key questions to consider in respect of how tax interacts with treasury , as well as how we can help you, are set out andliq uiditymanagementFinancial riskmanagementAssuranceand controlValuation andaccountingTax and the treasuryfunction Organizationand governanceTax and the treasury function IssueKey questionsHow we can helpForeign exchange Does the group have foreign exchange risk on financing activities?

9 Does the group net investment hedge in the consolidated accounts? Review of accounting hedges for tax effectiveness Advice on tax matching and hedging regimesInterest rate risk How does the group manage interest rate risk? Does the group enter into interest rate swap arrangements? Advice on tax treatment of interest rate swapsLiquidity and access to finance Does the group have sufficient access to funds? When are existing bank facilities due for renewal? Is debt being restructured? Tax advice on financing/refinancing and debt restructuring Advice on thin capitalization and other interest restrictions Cash management Does the group have visibility over surplus cash? Have existing cash pooling arrangements been reviewed for transfer pricing? Tax advice on cash pooling for participant companies Transfer pricing on allocation of benefits of cash pool arrangementWorking capital How is working capital managed within the group?

10 Is there significant intragroup trade? Transfer pricing advice on intragroup trading policy Advice on factoring/invoice discountingTreasury operations and location Does the group have a central treasury function? How effectively do tax and treasury teams engage with each other? Advice on implementing a central treasury company structureHedging commodity risk Does the group engage in hedging activities? Is the group fully aware of the tax treatment of hedging instruments , forwards? Advice on taxation of hedging transactions , forward contracts, currency swapsTreasury transfer pricing Does the group have significant intragroup financing? Does the group have a group-wide transfer pricing policy in place? Transfer pricing advice on group loan pricing policy, guarantee pricing and loan variations5 Ernst & Young treasury managementFinancial risk managementStrong market volatility, constant evolution of the international accounting standards and increasing importance of financial reporting prompt companies to improve regularly their financial risk knowledge and to optimize its management.


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