E Finance first von ra INTERVIEW P GUIDE FOR CA FINANCIAL RE The insider perspective on what you're expected to know ‘2 ther iGLOBAL CONVERGENCE STATUS COUNTRIES HAVE ADOPTED -IFRS Cree LEGEND: In the Indian context, convergence to IF eSereereT Tes is Ind AS transition itself India has successfully adopted IFRS throgh Ind AS BTR Meee ea ROR te Rol aoe alg standardisation to financial reporting and Improve investor a CTs ML yA} 2015: 2019: $28.15 Billion $44.01 Billion $50.61 BillionIFRS ADOPTION BY INDIA: IND AS NBFC~ Phase Il + all isted NBFCS Phase | NBFC- Phase | | NBFCS with net worth between ‘Allcompanies Phase Il - AIINBFCS with Net INR 250:500 er * Voluntary ‘adoption whet wort coor wort lsd comoanies Sthedule commercial , |= INR 500 cr Unlisted companies banks (excluding wae ining Tees soo er san se) a aie STU L Yam le Ved COE ee All listed companies and companies desirous of getting listed must transition to converged IFRS (Ind AS) BUM tele (mala esl (Me rele 1 Vo © One-way street: Once you transition to Ind AS, there’s no going back to erstwhile IGAAP Sere Pelee Ind AS adoption for banks Chieti has been perpetually deferred. BOR racy 12,000+ corporate Pe col oi groups* * Outside financial services & insurance sector * Within financial services & insurance sector3 SCENARIOS SUBSTANCE OVER FORM Preference Shares: ESOP Cost to Incurred Credit Debt or Equity? be mandatorily Loss vs. Expected fair valued Credit Loss G A SBI ITC Limited Zee SBI: Entertainment: ITC Limited: . Classification of redeemable eset INR 14,000 ET ete eg PAT by 5.5% rea ee} y crores Td (CCR need Cle aera impacted FY15 Zee Entertainment and ITC Limited case studies - as per a March 2016 report issued by Motilal Oswal.FINANCE FUNCTION SKILLS DEMANDED AT THESE LEVEL! © BUSINESS IMPACT OF TRIANGULATION OF © AWARENESS OF THE EVERY ACCOUNTING ACCOUNTING IMPACT CHANGING REPORTING TRANSACTION LANDSCAPE CFO & Controllers Z Mid-Level Management: Business Finance Financial Reporting Mergers & Acquisitions Shared Services, Secretarial te) Rm WAT) elt Bae ae UL) ) f IFRS has become a necessary MARKETABLE SKILL for upward progression within the finance function!FAQs - INTERVIEW PREP GUIDE Regardless of how you hear about an open position for a finance role, the most important factor is making a good impression in your interview. Your experience, knowledge, degree certificates and references will not work unless you demonstrate that you will be a right fit at the company, and in particular — within their finance team. Don't crumble under the pressure. It is a simple matter of proving to your interviewer that you have the actual articulation and knowledge to back up the financial reporting skills mentioned in your resume. This requires you to be confident and knowledgeable about IFRS since it's the world's most spoken accounting language. Our guide will familiarise you with the questions that you are likely to be asked in the interview. They're not all-exhaustive (we've kept the focus limited to showcasing your IFRS Acumen), but you must be sure to note the way each answer is structured, since they will be a good base for you to answer similar questions. Before we get to the actual questions, one key factor to note Flea Ra MUI ee ya tel-e (oN leet MR eZ) acres ima k Every question posed will thus have undertones ofBee RVR UR OM Ua clu) ee medi) you shouldered responsibility and ensured the timely completion of executing complex, detail-oriented tasks. If you're a fresher - these anecdotes can be about your academics or co-curricular activities. Not just a buzzword, but the most crucial assessment of a candidate that is carried out by the employer. Every finance team works like a set of well-oiled cogs and wheels — tasks and responsibilities of every individual are inexplicably tied with how well the provider of input for that individual performs their task. So be ready for questions from interviewers about how you work within a team. Describe your ability to work within a team, with specific instances of how you fostered a “go team!” attitude, and how collaborative work environments are where you excel. International Financial Reporting Standards (IFRS) are a set of accounting standards developed by the International Accounting Standards Board (IASB) that is now the global standard for the preparation of public company financial statements. IASB stands for the International Accounting Standards Board, that is responsible for setting up the accounting standards of IFRS. Any updates and revisions to the standards are also issued by the IASB.How Widespread Is The Adoption Of IFRS Around The World? Approximately 120 nations and reporting jurisdictions permit or require IFRS for reporting for domestic listed companies, although approximately 90 countries have fully conformed with IFRS as promulgated by the IASB and include a statement acknowledging such conformity in audit reports. ae eee ome mee Ua Mel hye By adopting IFRS, a business can present its financial statements on the same basis as its foreign competitors, making comparisons easier. This was also make the company more desirable to prospective investors! Companies with subsidiaries in countries that require or permit IFRS may be able to use one accounting language company- wide. Companies also may need to convert to IFRS if they are a subsidiary of a foreign company that must use IFRS, or if they have a foreign investor that must use IFRS. Companies may also benefit by using IFRS if they wish to raise capital abroad. Have Any Major US Companies Begun Transitioning To IFRS? Until the Securities and Exchange Commission (SEC) issues a rule allowing or requiring U.S. public companies to adopt IFRS, they must continue to prepare their financial statements under U.S. GAAP. Several large multinational corporations, however, have started using IFRS for their foreign subsidiaries where allowed by local law. Also, some U.S. subsidiaries of foreign-owned companies are also using IFRS. Financial Instruments — this is an area of contention and the reason why the SEC is resistant to converting to IFRS.When Comparing IFRS And US GAAP, What Are Some Overall Key Differences | Should Be Aware Of? At a broad level, US GAAP is rule driven, whereas IFRS is principle driven. There are 3 key principles in IFRS: 1. Substance over Form 2. Fair Value Measurements 3. Judgements & Estimates What Are Examples of Specific Differences between IFRS and US GAAP? © IFRS does not permit Last In, First Out (LIFO) © IFRS uses a single-step method for impairment write-downs rather than the two-step method used in US GAAP, making write-downs more likely. e IFRS requires capitalization of development costs once certain qualifying criteria are met. US GAAP generally requires development costs to be expensed as incurred, except for costs related to the development of computer software, for which capitalization is required once certain criteria are met. In US GAAP, SLM is also allowed for graded vesting, in IFRS its not allowed Does IFRS affect only financial reporting? IFRS is globally growing in acceptance, and all finance professionals will have to become knowledgeable about the global standards. Others, such as actuaries and valuation experts who are engaged by management to assist in measuring certain assets and liabilities, are not currently taught IFRS and will have to undertake comprehensive training. The impact of IFRS is far beyond finance function alone and it impacts M&A, Direct Tax, Indirect Tax, Business Finance & all other functions.(eM Aa ale a OM RMT Rete eel mcd introduction? IFRS 15 (Revenue from Contracts with Customers) brings in a lot of clarity and consolidates all issues related to revenue recognition for companies. Concepts like variable consideration being involved, principle-agent issues, and accounting of contract costs is addressed in a lucid manner. Under the erstwhile revenue recognition standard IAS 18, revenue recognition was primarily based on the transfer of risks and rewards. IFRS 15 instead, focuses on “control” of goods/ services being transferred to the customer. This may result in revenue being recognized at a different time. Ta OR Re eee cea Reach eee DR Ue Rm Ure IFRS 16 mandates all leases to be accounted in the balance sheet similar to finance lease accounting since these are lease commitments. On account of this, EBIDTA margins will go up (since operating cash flows will be reduced on account of the outflow being considered as a finance outflow). As a result, valuations of companies will increase. There are only a couple of exceptions of low value leases and short term leases that are not accounted for as finance leases. Are you aware of the 2008 financial crises? Do you know which aS aR eles IFRS 9 Financial Instruments solves the largest problem of identifying all instruments at fair value due to which the 2008 financial crisis had been witnessed by the entire globe. IFRS 9 speaks about “mark to market” (market value) of all instruments at a particular reporting date. It also discusses ECL model (expected credit loss, instead of the incurred loss model), Classification of financial assets and liabilities. This has pre-dominantly impacted the financial institutions the most.How do you think teams like Accounts Payable, Accounts IX TacdNe le) (Ne) Rema tiie) Aandi alee ia are Majority of the times, the shared services or operations teams fail to understand the larger implications of the transactions they facilitate. Thus it is imperative for these teams to realise how their roles and responsibilities impact the overall financial reporting of the enterprise. For instance, accounting of employee benefits, derivative documentation & accounting, and lease accounting is always done by the transactional teams. This input is then used by the financial reporting team for preparing the financial statements. Data maintenance by these teams, is thus a crucial reason for understanding IFRS. Are you aware of the practical aspects o' TM MUNRO eMule lac ale organizations (from IFRS reporting standpoint)? While IFRS 13 - Fair Value Measurement and IAS 21 - The Effects of Changes in Foreign Exchange Rates are all pervasive, and apply to all companies whenever these situations are broached. Other key standards are IFRS 10 (Consolidated Financial Statements), IFRS 3 (Business Combinations), IAS 19 (Employee Benefits) and IFRS 2 (Share-based Payment, IFRS 15 (Revenue from Contracts with Customers), IFRS 16 (Leases), IAS 16 (Property, Plant & Equipment), IAS 38 (Intangible Assets) and IFRS 9 (Financial Instruments).How will you be able to add value to our team if you join us? My understanding of the practical nuances of IFRS and its implications on the business will afford me perspectives of the wide-reaching impacts on the commercial side, the financial reporting, business finance and taxation requirements. | believe this puts me ahead of the curve since triangulation & articulation of the effects of IFRS, which is the need of the hour for finance professionals is what | bring to the table. How do you differentiate yourselves from other professionals? The answer to this question must be tailor-made for the role you're applying for. You must convince the interviewer of the value proposition of your addition to the team, by quantifying your efforts in your previous job profile. Auseful way of doing this, is the STAR Interview Response Method. ’ Situation: —> Task: Action: Result: Describe the Explain your Elaborate on the Your closing event or task/ specific actions you — remarks must be situation you _ transactional took to ensure timely about the tangible were in duties (day-to completion of your results that were -day) duties achieved on account of your efforts.For instance Accounts Payable: Instead of saying “I have dealt with processing and accounting of you could quantify it and say — “I have handled more than 1 million different types of transactions in my career, where dealing with different implications on IFRS, taxes and reporting was a part of my day-to-day. This ensured seamless reporting of the input data needed for the GL team.” ® Accounts Receivable: “| would have generated more than a million invoices for multiple customer profiles from different geographies and currencies, and have handled revenue recognition to the tune of <$$$>. I've also navigated my way around different contract types & have thus gained a learning of different commercial dimensions applicable to revenue recognition. My inputs have also been taken into account while structuring contracts for new customer profiles.” @ Payroll: Ona monthly basis, | have processed more than thousands of payroll, have handled exceptions with minimal intervention, and have an innate understanding of what kind of practical challenges are faced by companies. On account of this, | was able to pre-meditate a lot of the prospective challenges to timely reporting, and pro-actively ensured there were no delays.” Remember, whatever your previous role — always quantify your experiences in measurable terms. Let's not forget the next crucial part - Questions that YOU might have for your prospective employer. Most times, when candidates are faced with this situation, they ask a vague question or two about the role or the company.4 PRACTICAL SCENARIOS YOU MIGHT BE QUIZZED ABOUT. WATCH THE ACCOMPANYING SHORT VIDEOS FOR CONCEPTUAL CLARITY! attest let als sie Q . TAX RATE & STATUTORY TAX RATE? MOST IMPORTANT CONSIDERATION (0 RTS Ca aces © for the VideoIDENTIFYING PERFORMANCE OBLIGATIONS IN CONTRACTS © What are the considerations for recognizing revenue, in case someone purchases a cooling unit and an annual maintenance contract at a bundled price that’s less than their standalone selling prices? « Is there more than one performance obligation in this contract? If so, how will you allocate revenue between the cooling unit and AMC? CLICK HERE c aA Ae) THE MOST PERTINENT QUESTION FOR em aaNet lela PLU « The biggest software services companies grapple with identifying the number of distinct performance obligations in bundled contracts, like the below: Software oe ingtaliation ° ur sweat jed Futur 3 ‘© What if the installation involves substantially customizing the software for it to integrate with other systems in the user’s machine? CLICK HERE c for the VideoDon't stop at that. Make sure you've done your homework in researching about the profile, the company and the industry. Ask pointed questions. They don't necessarily have to be limited to your exact profile. Here are a few questions to help you get started: 1. What is a typical day like? N . What are things that people in my profile like about their job? w How often does the company have trainings and upskilling opportunities for employees? . What is the future of the industry for the next few years? Do you foresee any major industry innovations or changes that will affect the business model of the company? Will that have an impact on financial reporting? 5. What is the career track in the industry? What additional financial reporting or management skills will | need to develop two years down the line? . What is the culture of the company compared to a Fortune 500 company? How would you compare it to the culture in a bootstrapped start-up? 7. Tell me about your career pathIMPACT ON STAKEHOLDERS © Changes in Profit and EPS Investors may INVESTOR form expectations on new accounting RELATIONS policies & expect certain accounting outcomes © Debt covenants that do not provide for DEBT changes in accounting standards: COVENANTS Financial position changes may cause & FINANCING these covenants to be breached. Company to ensure ability of continuing financial arrangements When seeking to raise finance, comparative figures will need to apply IFRS e Accounting for potential acquisitions bale will be altered by the adoption of IFRS (Xs eWEtiehtts Past mergers/ acquisitions may contain clauses including price revisions based on accounting data Consolidation method may impact structure of new arrangements e Forecasts and internal performance Na measurements may no longer be INFORMATION comparable with results in financial reporting (eg: Fair value change) Making forecasts will be more difficult Changes in balance sheet and key ratios may impact covenants Significant one-time costs of converting to IFRSIMPACT ON BUSINESS 02 Financial Instruments © Classification of financial instruments © Implications on Debt/Equity ratio e Larger ECL business implications for NBFCs and Banks IFRS 16 01 Leases Valuations EBITDA increase for Lessee Impact on balance sheet ratios Impact on borrowings from banks IFRS 15 04 Revenue from Contracts with Customers e Revenue accounting (difference b/w total revenue and income) ° Variable Consideration, Financing Arrangements 03 Share-based Payment ESOP accounting at fair valuation « Termination benefits » Implications of assumption changes © IFRS 12 05 Income Taxes Deferred tax on undistributed profits Example: A Large company in ThailandOPPORTUNITIES 02 VALUE-ADD FOR YOUR COMPANY © @ 01 GEOGRAPHICAL UPSKILLING ecu Ruy Co See Ul kur Pee seer) eee hes Ress a large skill gap on my CV, Peer ance Ling eeicch rescue Ce CMa c ts prompted me to gain real- world IFRS skills (and of- Cee is certification). Pleased to say, Pee ue n a same year. 04 CAREER OPPORTUNITIES a 03 NEW CAREER PATH oa eee) finance work profile spanning Pe et ee) chartered accountant, but | Pernnen shore eit] Eee ona Rene Rae os Reuter) course, and the DipIFRS Pee Rue rg Pe eee ed Era 06 UNDERSTAND THE BUSINESS SIDE Le 05 CROSS-FUNCTIONAL CAPABILITIES GU a ee Cecio Cer scene: tay Bee ers perfect career direction.CURRENT OPENINGS 528,000 The global opportunities that require IFRS and The jobs you will be skilled to apply for, after learning IFRS 28,000+ a AX TT) Toy he 380,000+ “FINANCE”IFRS ACUMEN COURSE palicieietii | covert IFRS/Ind AS CTT Cea De eer i uring Tere Lrd Business Ls Polley TTA Tc Taxation * Brief overview of IFRS/IND AS Key concepts & Framework, Financial statements presentation, PPE etc. + Implication of IFRS 16 on various industries Seu nicesces sured ea eel.) ea kee CRS cnn ee ete euch uetar et ubecas benefits due of COVID BU Ee ae Rune cn Ree ed feo DEL) Implication on other Geographies of COVID 19 and accounting ess Pe Ue auE au uC Curr uae are ec R&D spend due to COVID 19 Ce Stare eee Dee ee RUC Bm Cue URC COCR Cue mele UC RC aC Rue eC Cue Ru eee BERL Ld ‘Accounting for business combination and consolidation De aU CUR eeu Lay UU Cs UCU Cor eer LE PRO cu eee USCC Oe mee DECI ae RUC aac ROLE Du cre Per en ees em Aine retest cnet urea oe OM Rae e Beet Rene La eee a ee et Sa Seo eats eee) Oe Nona ee see * Accounting and implications of various benefits available in different eryWHAT WILL YOU GET? Gk Lifetime Access to Complete Course. 15+ hours of recorded interactive sessions with real-life business examples and cross industry case studies to learn IFRS and At your convenience! Plus, Exclusive Bonus Content 1. Illustrative Handbooks: 2. Interview Prep Guide for careers in Financial Reporting 3. Strategic Insights into IFRS ImplementationIFRS ACUMEN: The 15-hour crash course Pet See ae eR Rate RC ECR Coll covered. DTT MCD Me) Rem RC ee CeCe) te Be) confidently manage a technicalconversation about IFRS— all packed into one single product. PRTC elas We want to give you the practical skills you can apply immediately at ee a RU oe mele ar UC ON eee me a Ra le Fem ton Oc ORCC eeu eras Ce RE (came R an el eee ue RUC reporting — this is an engaging course to make youthe “go-to-guy/gal” for Sauce MER aera aoe Prepping for an interview? Looking to understand how yourole in the finance team is evolving?Get up-to-speed with vitallFRS perspectivesin Racal Rome Tec Uce ee cerca oe Rete ace uel ire ee MU ec ee Cluylord from international companies that implemented IFRS over the last decade!IFRS ACUMEN Meet your Trainer You are astudent of finance, or a budding finance professional, so you want to find out what IFRS is all about, “ but don’t have time for long courses | know how you feel- that’s why | designed this course to be short, but ruthlessly effective! The most important pieces of the jigsaw- seasoned executivesand managers who need to understand the implications of IFRS in order to make effective decisions, comply with regulations and plan ahead- “This course will equip you with all the information you need to make strategic decisions about IFRS for your company’s future. To my fellowCFOs and industry veterans- there is plenty ofopportunityfor your business to grow. “ But are you awar that these opportunities come withan obligation to comply with International Financial Reporting Standards (IFRS)? This course is loaded Formerly the global finance controller at one of India’s largestsoftware companies & author of the bestselling Ind AS book published by CNBC TV-18, he is now CFO at ConTeTra Universal LLP, a finance start-up with a niche in technical trainings and finance consultancy. Mr. Ramanujam Narayan CFO & Co-Founder ConTeTra Universal LLP