IFRS Consultant (Phase 2), Addis Ababa
1. BACKGROUND: Enterprise Partners
Enterprise Partners (EP) is part of the 7-year programme known as the Private Enterprise Programme Ethiopia (PEPE) focused on wealth-creation, funded by Department for International Development (DfID) and implemented by DAI-Europe (UK) along with its consortium partners.
EP follows the Making Markets Work for the Poor (M4P) approach, which emphasizes correcting market failures that constrain the poor, promotes deep understanding of incentives of actors in the sectors as well as those stakeholders playing a supporting role.EP emphasizes intervening at the level of the support markets to enable market change to be scalable and sustainable.
EP pillars are:
· The Finance Group is expected to achieve the outcome of increasing investment levels in the Ethiopian economy, particularly for growth-oriented small and medium enterprise. This will include funding of green technologies where appropriate.EP de-risks innovation and spurs industry coordination among providers of financial services and their supporting markets to increase financial inclusion.In addition, EP will be providing technical assistance to The Development Bank of Ethiopia (DBE) and participating financial institutions to the World Bank Small and Medium Enterprise Finance Project expected to start in the second half of 2016.
· The Agro-Industrial Group is expected to achieve the outcome of increasing returns on investment (productivity) and investment levels in the identified sectors of cotton/textiles, livestock/leather and horticulture, in order to achieve the impact of creating jobs and raising household incomes. Additionally this pillar will incorporate the promotion of climate change awareness and addressing women’s economic empowerment.
Background specific to this assignment
In January 2015, Accounting and Auditing Board of Ethiopia (AABE) was established pursuant to Financial Reporting Proclamation No. 847/2014. AABE prepared an IFRS Implementation Roadmap requiring all financial institutions and public enterprises to implement IFRS commencing July 1, 2017, and to make adequate preparations during the period covering May 2016 through June 2017.
DBE recognizes and expects that a proper implementation of IFRS would result in far reaching benefits to its overall operations. Among areas that would be impacted would be the bank’s core banking system, accounting and control systems, contractual agreements, and human resources operations. DBE also acknowledges that it does not have the expertise required to implement full IFRS across its operations. Hence, DBE requested the support of EP in acquiring the appropriate IFRS expertise to assist the bank in implementing IFRS and activities related to the implementation of IFRS.
In late October 2016, EP hired an IFRS expert to conduct Phase I of the assignment to assist DBE in proper implementation of full IFRS activities arising from IFRS conversion process. Phase 1 assignment, clarified the current gaps to reach IFRS and provided DBE with plans to become IFRS complaint by July 2017.
DBE is a specialized financial state-owned institution established to support the development agenda of the country. It plays a pivotal role in financing viable projects from the priority sectors of the government by mobilizing funds from domestic and foreign sources while ensuring its sustainability.
The overall purpose of this assignment is to guide and assist DBE in proper implementation of full IFRS and related activities arising from IFRS conversion process. As Phase 1 of the assignment was concluded in late November 2016, Phase 2 will begin immediately. Phase 2 assignment will require the consultant’s technical guidance and support to DBE in the implementation of the end-to-end process of IFRS conversion, including facilitating knowledge transfer.
3. SPECIFIC TASKS
The consultant is expected to bring his/her international experience, judgement and best banking skills to complete this assignment related to pragmatic application of IFRS conversion at DBE. In addition, the consultant should align with the IFRS roadmap developed by the Accounting and Auditing Board of Ethiopia (AABE) in undertaking the following tasks and activities:
A) Review and adjust, if necessary, DBE’s IFRS Conversion Strategy and Process, and Conversion workplan, as developed in Phase I of the assignment.
· Review all relevant proclamation and policies related to IFRS implementation in Ethiopia.
· Review the IFRS Implementation Roadmap that requires all financial institutions and public enterprises to implement full IFRS beginning July 1, 2017.
· Review and prioritize the activities listed in the IFRS Conversion Strategy together with the appropriate DBE’s senior management.
· Review and revise the work plan developed during Phase I of the assignment that includes all key activities and sub-activities to ensure that DBE fully adopts IFRS for the fiscal year ended 30 June 2018. Ensure that all activities are clear to those who own the workplan. A revised detailed Gantt chart must be prepared.
· Hold substantive discussions primarily with DBE’s senior management andappropriate staff. Meetings could be held with DBE’s external auditors, National Bank of Ethiopia, AABE, among others, as necessary.
B) Develop risk mitigation and change management plans for the conversion process.
C) Assess the impact of IFRS at DBE.
· Review and revise the gap assessment completed in Phase I of the assignment.
D) Guide and support the Bank in analysing the present and defining future impact of IFRS on Accounting and reporting, system, process, control, business model, people and IT requirements.
· Focusing especially on system changes for capturing and reporting new data requirements, alignment of internal and external reporting, re-classifications and additional reporting criteria (chart of accounts), updates to existing mapping tables of the financial system, , financial statement presentation, additional disclosure information needed for IFRS reporting, accounting for income taxes and tax accounting methods, financial measurement and reporting tools and data capture for accounting and management reporting, as well as on the potential impact of IFRS-reported results.
· Providing pragmatic solutions in adopting IFRS-compliant financial reporting system, in a well-articulated manner/template.
E) Guide and support the Bank in reviewing and analysing the present financial statements, account and balances to ensure compliance with the accounting standards and methodology of IFRS.
F) Guide and assist the Bank in mapping and reclassifying the accounts and balances in accordance with IFRS.
G) Review and validate the new IFRS accounting treatment.
H) Guide and assist the Bank in:
· Preparing the framework for practical measurement of impairments (expected credit losses) under IFRS 9;
· Preparing the data and IT system requirement for recalculating the effective interest rate, commitment fee, upfront fee, discount, premium, interest income and outstanding balance (amortized cost) every month for each loan (with simple interest rate, interest incentive scheme, interest rate below market rate, and payment period less than 12 months) and borrowing;
· Determining the effective interest rate and amortized cost for each financial asset and financial liability carried/measured at amortized cost, using reporting formats/templates;
· Determining the recognition, de-recognition, measurement, classification, presentation and disclosure requirements for each asset, liability, equity, revenue and expense, especially focussing on the recognition, measurement and disclosure of loans and advances, treasury bills, government special bonds (interest-bearing and non-interest bearing), government savings bonds, corporate bonds, equity investments, hire-purchase leases, repossessed collateral held for sale, financial guarantees, provisions, contingent assets, contingent liabilities and government grants and assistance, using reporting formats/templates;
· Preparing the framework for application of fair value measurement hierarchy for financial assets and financial liabilities categorized within level 1, 2 and 3, based on the nature, characteristics and risks of asset or liability, as well as on the availability of quoted prices in active markets, observable and unobservable inputs to valuation; (In this regard, the objective realities prevailing in the Bank in particular and in the country in general should be duly considered.)
· Preparing the framework for determination of sensitivity analysis for interest rates, foreign currency and others, including the disclosure requirements;
· Preparing the framework for related party disclosures and interim financial reporting.
I) Guide and assist the Bank in the preparation of the comparative financial statements and required disclosures (for one year) in compliance with first-time adoption of IFRS (considering that the Bank shall be required to present its first IFRS financial statements for the year ending on 30 June 2018). Guide and assist in reviewing supporting documentations.
· Identify all the standards that are effective at the end of its first IFRS reporting period (ended on 30 June 2018), including the early application of those new standards that are not effective at that date.
· Identify mandatory excerptions and optional exemptions from the general principle of retrospective application in the Bank’s first IFRS financial statements, including comparative information.
· Prepare opening IFRS statement of financial position as at 1 July 2016, which is the Bank’s date of transition to IFRS (the beginning of the earliest period for which full comparative information in accordance with IFRS is presented).
· Prepare statement of financial position as at 30 June 2017, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.
· Prepare an explanation of transition adjustments and reconciliations of equity and total comprehensive income as of the transition date (1 July 2016) and as of 30 June 2017 and for the comparative period ended 30 June 2017.
· Prepare notes explaining the principal adjustments made by the Bank in restating its Local GAAP financial statements, including the statement of financial position as at 1 July 2016 and the financial statements for the year ended 30 June 2017.
· Prepare notes to the reconciliation of equity as at 1 July 2016 and 30 June 2017 and total comprehensive income for the year ended 30 June 2017.
· Prepare disclosures explaining how the transition from the previous accounting to IFRS affects the Bank’s reported financial position, financial performance and cash flows, including the comparative information.
· Prepare first interim financial report as at 30 September 2017 and for the quarter then ended September 30 2017, along with comparative period data and reconciliations of equity as at 30 September 2016 and total comprehensive income for the quarter ended 30 September 2016.
· Prepare all disclosures required for first quarter of 2016/17
J) Regularly update/report IFRS to Implementation committee, Accounting Committee and other appropriate senior management on progress of the conversion project.
K) Guide and support the Bank in the ongoing documentation process.
· Prepare new accounting policy and procedure manual in accordance with IFRS, including proposed disclosure practices.
L) Guide and support the Bank in the final review process by DBE senior management, internal audit and external audit
· Prepare comprehensive IFRS implementation/application guideline/manual with checklist.
· Prepare final presentation (exit report) on the conversion to different audiences, including accounting professional development program.
4. DELIVERABLES AND TIMEFRAME
The timeframe for this assignment will be through end of October 2017 with 140 working days.
The deliverables to be submitted by the consultant to DBE and EP include the following:
Deliverables or Milestones
Level of Effort (working days)
Submit a revised DBE’s IFRS Conversion Strategy and Process, Conversion work plan (a Gantt chart) and IFRS Implementation Roadmap (with all key activities and sub-activities reflected), revised gap assessment, and risk mitigation and change management plans, as set forth in 3 (A), (B) and (C) (of the specific tasks) above
10 days from start of assignment
Submit IFRS accounting policy and procedures with pragmatic recommendation on alternative accounting policy choices, in accordance with 3 (K) (of the specific tasks) above
Submit opening IFRS statement of financial position at 1 July 2016 with disclosures and notes
Consultation and presentation at regular intervals and/ or in each milestone stage, as the case may be, in accordance with 3 (A) and (J) (of the specific tasks) above
Submit a full-fledged report on the recognition, de-recognition, measurement, (re)classification, mapping, presentation and disclosure requirements for each asset, liability, equity, revenue and expense, as well as on all other issues addressed, in detail, in 3 (F) and (H) (of the specific tasks) above
Submit a complete report on defining present and future reporting requirements and additional other requirements, including review and test requirements, as set out in 3 (E) (of the specific tasks) above
Submit a complete set of IFRS comparative (quarterly and annual) financial statements for the fiscal year 2016/17 with all required disclosures and notes for first time adoption, as stipulated in 3 (I) (of the specific tasks) above
45 days (including quarterly reports, within 15 days after the end of each quarter)
Submit comprehensive IFRS implementation/application guideline/manual with checklist
Submit validation report on the new accounting treatment in each quarter, including provision of constructive feedbacks
Prepare first quarter financial reports for the period ended 30 September 2017, accompanied with disclosures and notes, as stipulated 3 (I) (of the specific tasks) above
10 days ( at the latest by 14th of October 2017)
Submit final presentation and exit report on the IFRS conversion to different audiences, as explained in 3 (L) (of the specific tasks) above
140 working days
The assignment will begin as soon as possible, but no later than January 16, 2017.
5. WORKING ARRANGEMENTS
The Consultant will be based at DBE Head Office, working closely with the Director of the Finance and Accounts Management Directorate (FAMD), the IFRS Accounting Committee, the IFRS Implementation Committee and other pertinent directors, in a more collaborative, proactive and interactive manner.
In addition, reports and presentation will be expected to be submitted to the Bank’s management at different echelons, including the Board of Management, and the external auditors as well, at regular intervals.
At Enterprise Partners, the Consultant will also report to the SME Finance Lead.
6. CONSULTANT REQUIREMENTS
A Consultant is required to closely work with DBE in the implementation of the end-to-end process of IFRS conversion.
Senior-Level Expert in International Financial Reporting Standards
· Minimum of 10 years relevant international experience, especially at first time adoption of IFRS in the banking context.
· Highly specialized accounting capability supported by relevant accounting professional qualifications/certificates such as ACCA, CPA and IFRS.
· Experience working with financial institutions and IFRS globally.
· Experience in developing a technical assistance plan for financial institutions at first time adoption of IFRS.
· Competencies required include:
o Fluent in spoken and written English.
o Excellent writing and presentation skills.
o Excellent workplan developing skills.
o Ability to work under pressure and meet tight deadlines.
· Knowledge of the Ethiopian financial sector is an asset.
· Ability to provide the required services will be assessed through submission of:
o Detailed CVs of consultants.
o References on previous similar work.
ANNEX A: BACKGROUND DOCUMENTATIONTO BE PROVIDED TO THE CONSULTANT
- Financial Reporting Proclamation No. 847/2014
- IFRS Implementation Roadmap prepared by AABE
- Documents prepared after Phase I of IFRS Conversion project:
- Assessment Report
- The Conversion Strategy and Process
- Gap Assessment
- Workplan for conversion project through June 2017
- for conversion project through June 2017
HOW TO APPLY:
7. APPLICATION PROCESS
Application Deadline: January 10, 2016, 1PM Addis Ababa time, (GMT +2)**
Interested applicants should email their CV and a cover letter to the following email address: EPJobs@Enterprisepartners.org
Closing date: 10 Jan 2017
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