From a consolidated breakfast, through an afternoon at the Royal Society of Arts, to a stampede out of London to avoid the tube strike, Wednesday was interesting to say the least.  And as for the parallel universe, read on…

It started with a breakfast briefing at CIMA HQ, the topic was consolidation – no not in the audit market but rather the production of consolidated financial statements.  I talked briefly (it was early !) about the IASB’s proposals in their recent exposure draft – ED10 Consolidated Financial Statements – and was followed by speakers talking about the future of financial reporting and faster close procedures.

The main message from my presentation was that the IASB’s proposals are centred on trying to improve the definition of which entities are consolidated rather than how to consolidate them.  The IASB’s exposure draft closed for comment in March 2009 and the Board is currently reviewing responses which have not all been entirely supportive. 

The ED requires consolidation where a control relationship exists and it defines control as the power of a reporting entity to direct the activities of another entity to generate returns for the reporting entity.  This approach has not been universally welcomed.  Many commentators fear practical implementation issues especially as the ED envisages control existing where the reporting entity does not hold a majority of the voting rights in circumstances where the other shareholders are dispersed and not organised as a controlling majority block.  If you want more detail go to the CIMA consultation database or the IASB project page

Gary Simon, from FSN the business systems news provider for finance and IT professionals, then spoke about the latest trends in financial reporting including the UK government introducing Sarbanes Oxley see through the back door and new technologies driving efficiency in the fast close process.  The technologies allowing web-based data management, data traceability, decentralised reconciliation and the management of text inputs to allow improved narrative reporting were all way beyond the tools available to me when I was responsible for consolidation for a FTSE 250 group some 10 years ago.

Finally, Shak Akthar, from Tagetik the consolidation software systems house, explained that for a faster close of the last mile in the consolidation process (actually adding across the numbers) companies need to improve their preparation, automation and monitoring of the activities that precede this stage.

Following the breakfast briefing I spent some time in the ‘parallel universe of Microsoft Office’, a term I picked up from Gary Simon, battling to keep on top of my email inbox.  Has anyone found an answer to this issue that doesn’t involve the brutal step of block deletion of unread messages?

The afternoon at the Royal Society of Arts was to attend a seminar on corporate reporting hosted by Radley Yeldar (RY), the communications consultancy who CIMA have joined with to work on the Report Leadership initiative.  This seminar was held to discuss RY’s review of FTSE 100 annual reports in terms of narrative content and communications and also corporate responsibility reporting.  The event concluded with the announcement of RY’s top ten performers in terms of both the printed annual report and also online reporting.  There was no Oscar-style glitz and glamour and no red carpets to walk down but well deserved first places were taken by Land Securities Group for their printed report and by Barclays for their online report.  Others ranked in the top three were Capita Group and Aviva (printed) and Legal & General Group and Centrica (online).  This was the first year that RY have publicly reviewed CR reports and they did not rank their top ten performers – that will come next year.  Top marks in this area went to company reports that contained a clear company overview, a recognition that business strategy and CR strategy are explicitly linked and an accessible discussion of risks and opportunities and marketplace issues.

And then the fun began!  The tube strike was due to start at 7pm and so I thought I could make my way to Paddington as usual to catch my train out of London.  However, it quickly became apparent that a strike starting at 7pm meant that tube services would be affected well before then as tube trains needed to be back at their depots by 7pm. 

When I eventually got to Paddington the number of people crowding onto the train to Reading was incredible.  Of course, the daily exodus normally spread over a few hours was concentrated into a much shorter timeframe as commuters flocked to mainline stations ahead of the tube strike– after that journey the thought of spending a couple of hours in a parallel universe courtesy of Mr Gates doesn’t seem so bad.