FINANCIAL REPORTING ADVISORY SERVICES

Financial statements are the ultimate report card of a company’s fiscal performance. They enable owners and managers to pursue their business objectives, whether they are raising capital, acquisition, divestiture or restructure. Therefore, every business activity, through the company’s lifecycle, impacts the financial statements and hence needs to be carefully examined and analysed.

Our FRAS group is a set of professionals who have significant hands-on experience in providing end-to-end solutions and support services relating to complex financial requirements in a wide range of scenarios:

GAAP CONVERSION

 

With global corporate integration enabling exponential growth for Indian companies, financial reporting in an internationally accepted framework is inevitable. For dynamic Indian businesses, the challenge to catapult into the next phase of growth magnifies with the ever-increasing focus on quality and transparency of financial reporting by various stakeholders. On 16 February 2015, the MCA notified the Ind AS and roadmap for implementation thereof. Further cross-border acquisition and Equity /Debt raising in a different market may trigger GAAP conversion. At KNAV, we understand the importance of aligning financial reporting with regulatory changes and the need for accurate financial reporting.

Our professionals are experienced in the following GAAP conversions

  • IGAAP to Ind AS
  • IGAAP/ IFRS to USGAAP
  • IFRS/ USGAAP to IGAAP/Ind AS

 

FINANCIAL STATEMENT PREPARATION

 

Companies in India transitioned to Ind AS in a phased manner. Likewise, companies worldwide are moving to IFRS. With Ind AS/IFRS being evolving GAAPs, there are bound to be reporting challenges for companies. Our team of professionals takes the pressure away from in-house finance teams by preparing a set of compliant financial statements:

When are these services needed?

  • The services are required when the financial statement have accounting complexities like business combinations, complex financial instruments
  • When companies do not wish to maintain dedicated financial reporting teams for a task that is only annual or quarterly
  • When there are key changes in accounting guidance that trigger rehashing of the financial reporting process
  • When there are complex group structures where professional assistance is required to meet statutory timelines and to handle the size and volume
  • When the finance teams are not yet geared up to deal with speedy changes

What do we deliver and what is our approach?

  • We defining key milestones:
    • Prepare ready-to-use templates
    • Map chart of accounts
    • Make financial statement structures (including consolidation workings)
  • Key deliverables:
    • Structured templates for GAAP adjustments/major accounting computations
    • Financial reporting templates

 

TRANSACTION ACCOUNTING

 

Complex transactions often require documented analysis, GAAP interpretation and some judgement. An inexperienced finance team makes the accounting for these non-routine/complex transactions prone to errors. Our team of professionals deals with such transactions regularly. We offer our transaction accounting services for specific needs of companies which have either entered into or are contemplating entering into a complex transaction:

Complex transactions we regularly deal with:

  • Business combinations
  • Financial instruments
  • Debt v equity classifications
  • Embedded derivatives
  • Modification of financial instruments
  • Shareholder agreements with investors
  • Joint venture agreements
  • Power purchase agreements
  • ESOP schemes
  • Assessment of control over an investee
  • Recognition of deferred taxes
  • Complex leasing arrangements/embedded leases
  • Service concession arrangements
  • Revenue recognition, assessment of performance obligations

What do we deliver?

  • Advice on structuring transactions
  • Technical accounting memos
  • Accounting opinions

 

NEW STANDARDS IMPLEMENTATION

 

IFRS is a continuously evolving GAAP and so is Ind AS, drawing its dynamism from IFRS. In the recent past, GAAPs have seen significant new changes, with the coming of IFRS 9 and IFRS 15, which impacted most companies’ financial statements in ways that mattered. IFRS 16 and IFRS 17 are all set to impact financial statements again in the near future.

Our team of professionals tracks development in accounting standards from the exposure draft stages and prepares for its implementation long before they are applicable. We help companies prepare for these new accounting changes and implement them.

Key changes due to new accounting standards

  • Complete rehash of financial asset classification guidance
  • Expected credit losses – a fresh approach to financial asset impairment
  • Revenue recognition guidance – Global alignment of revenue recognition standard, brought in the 5-step model, which among other things completely changed the way real estate companies in India accounted for their revenue
  • IFRS 16/Ind AS 116 brings all leases on the balance sheet – a completely new way to look at lease obligations

Why do companies need us?

  • Limited training, experience and bandwidth of finance teams to handle the change
  • Lack of information systems in place to report under new standards
  • Lack of industry insights, for practical techniques and efficient implementation

What do we deliver?

  • Detailed diagnostic report
  • Process design for sustainable reporting
  • Implementation support
  • Automated template designs
  • Preparation of disclosure and updates to financial statements

 

FORENSIC AUDIT AND INVESTIGATION

 

Business environment today is volatile, fraud risks on the rise, perpetrators increasingly sophisticated, stakeholder expectations getting higher and regulatory enforcement, heightened. Against this background, vulnerabilities of a variety of fraud, misconduct, money laundering, bribery, kick-back schemes, amongst others, pose a substantial threat to financial, operational, and brand value of any business. It is therefore not an overstatement to say that identifying and mitigating these risks is crucial to a business’s existence.

Our Forensic and Investigation Services is the answer to help you overcome these critical business challenges, effectively. Our team stands solid on experience and subject-matter expertise to provide the right insight, from strategy to execution. We cover the spectrum of investigative and forensic services and take pride in having worked on diverse engagements, cutting sectors.  While we tailor our solution to a client’s requirements, the agility, conviction and sensitivity with which we approach any issue is constant.

Our service offerings

Comprehensive portfolio of forensic services under one roof. Undertaking complex investigations, providing the right business intelligence, appropriate response plans, from proactive to reactive services, we possess the right capabilities to address your requirement.

We create value by providing niche solutions with every step of the way to support you achieve your goals.

  • Investigating allegations spanning a range of corporate irregularities
  • On-field market intelligence
  • Tracing embezzled funds or assets
  • Assessment and investigation of whistle-blower complaints
  • Developing an anti-fraud programme
  • Assistance in remedial actions
  • Bribery risk assessment
  • Anti-bribery due diligence
  • Regulatory compliance framework or periodic compliance review
  • Forensic technology assistance
  • Dispute resolution to unravel complex business disputes
  • Expert witness testimony

 

Why KNAV?

  • In-depth exposure to versatile forensic engagements, from seemingly benign, to complex investigations
  • Act with agility, keeping in mind the urgency of the situation
  • Functional diversity of our people, our team comprises of former CBI officers and intelligence experts, Chartered Accountants, Lawyers, certified fraud examiners, field experts, background intelligence experts and management graduates
  • Deployment of cross-functional resources
  • Synergies of member firms across the globe
  • Customised services to answer your unique business concern

 

FINANCIAL DUE DILIGENCE AND REVIEW

 

Our team of sector and technical experts specialise in due diligence and offer a proactive and pragmatic approach tailored to mitigate risks and provide value beyond the deal.

We partner with you to identify and mitigate potential transactional risks, to assist you in taking an informed decision and to provide tailored recommendations on deal-related challenges.

Our team of sector and technical experts specialise in due diligence and offer a wealth of industry knowledge and operational experience. We would provide you with a scalable solution that can be tailored to mitigate the complexities involved in deals.

Our goal is to offer a powerful combination of excellent service and responsive relationships to deliver relevant and cost-effective solutions based on industry best practices.

Our approach to due diligence provides insights on:

  • Quality of revenue – Identifying the key business drivers
  • Quality of earnings – Ascertaining the sustainability of earnings
  • Working capital – Normalising for seasonality and one-off items
  • Net debt – Estimating immediate cash outflows
  • Contingent liabilities – Summarising the significant exposures
  • Tax positions – Assessing the history of claims and risk areas

Our financial and tax due diligence service would assist you at various stages of the investment life cycle:

  • Private Equity due diligence: Due diligence services that are clearly linked to PE firm’s in evaluating an investment in a potential target.
  • Buy-side due diligence: Due diligence services that are linked to our corporate client’s requirements as purchasers/acquirers.
  • Sell-side/vendor initiated due diligence: A balanced and independent due diligence approach considering the management’s views and comments on the identified issues which would help the prospective purchaser take informed decisions.
  • Vendor Assistance: Due diligence services to identify potential impediments during an exit or to address value impacting issues at an early stage, helping clients take corrective action.

 

GOVERNANCE, RISK AND OPERATIONS

 

Today, with regulators, investors, and independent directors focusing on the importance of corporate governance, organisations need to streamline and fine-tune their processes and controls. Leadership teams are repeatedly turning to their internal auditors for additional assurance on the robustness of the systems as well as for risk mitigation controls.

We focus on effective risk mitigation by setting up robust processes, institutionalising the right internal controls, leveraging IT and achieving performance improvements. Organisations are seeing increasing digitisation of their operations, resulting in an exponential growth in data generation across all business functions. Keeping abreast with this trend, our internal audit (IA) methodology integrates data analytics to provide increased efficiency, assurance and value.

Our IA team has progressive thinkers from various industries which enables us to make sure that we have the right business insights and best practices for our clients.

Our key solution in the corporate governance space includes:

  • Corporate Governance
  • Internal Audit
  • IFC / SOX compliance
  • Performance enhancement
  • Standard operating procedure

We are a cut above the rest:

  • Experienced team of professionals with domain specialisation across industries
  • Higher involvement of senior team members in the delivery
  • Practical recommendations relevant to business by providing
  • Involvement of cross-functional experts in execution