Microgen Accounting Hub (MAH) enables CFOs to be confident in delivering IFRS

Microgen (LSE: MCGN) today announced it has updated Version 2.5 of its Microgen Accounting Hub (MAH) software to help financial institutions to face the transition to IFRS and the new regulations that have emerged in the wake of the global financial crisis. The MAH product life cycle methodology enables a financial institution to move to IFRS with the confidence that the entire organisation can follow the agreed accounting principles and policies set out by the institution and interpreted and applied within the MAH Accounting Engine.

Among the new regulatory pressures that firms face are FAS 157 in the US and the transition for US companies to IFRS accounting standards already in place in the EU and other major markets.

FAS 157 has introduced many of the fair value accounting standards central to the IFRS philosophy. IFRS, for which the deadline for adoption is currently December 2014 in the US and 2011 in Canada, puts the onus on financial institutions' executives to accurately represent the fair value of assets and liabilities.

MAH Version 2.5 includes new IFRS templates for derivatives, secured lending and borrowing, bonds, equities, mortgage products and insurance policies to help simplify the transition to balance sheet valuation. MAH also includes pre-configured accounting for IFRS designed around product groupings and product life cycle accounting events. This combination enables institutions to simply extract data from any part of the organisation and map it into the defined accounting to generate consistent IFRS accounting for insurance and banking products.

In the short-term, MAH Version 2.5 can be used to implement delta accounting from current GAAPs, giving firms the ability to create consistency during the IFRS migration.

“Challenges lie in planning the move to IFRS at a time when, particularly in the US, the final shape of the IFRS standards likely to be adopted is not clear. However, the move to an international standard is urgent and the need for full transparency into the impact of financial assets on P&L is critical for banks in urgent need of capital and funding. Underlying this is the complexity of managing the accounting for assets spread across a financial institution within a myriad systems,” said Microgen COO David Sherriff. “By providing a function rich, packaged, yet highly flexible and configurable solution, financial institutions can use the Microgen Accounting Hub to provide a head start in managing the coming wave of transparency-driven regulation.”