As we head rapidly towards the end of the year, we offer some thoughts for issues that may not be front of mind, but which, nevertheless, you may want to consider as we enter the year ahead.
The period of very low interest rates may be coming to an end. Now is the time to make sure your teams appreciate the potential impact of operating in a higher interest rate environment, something many of them will not have experienced.
As well as checking covenant triggers, the organisation’s fixed/floating mix and interest rate policy should all be reviewed with the prospect of higher rates firmly in mind.
The new leases accounting standard IFRS 16 comes into effect on 1 January 2019. Lessees will now have to account for virtually all leases, such as renting office space, on balance sheet which will require significantly more data on their leases than before. For those with more than a handful of leases or rental contracts this could be a big task.
The revised EU MMF regulation takes effect from January 2019 but decisions about which funds to invest in going forward need to be made and investment policies reviewed and potentially revised beforehand. See our article below
MIFID II - may be relevant to you if you:
MIFID II is extremely confusing – unfortunately much of the guidance available appears contradictory, and some elements of the regulation (for example relating to derivatives, is still not finalised). At this stage, your lawyers may be the best point of contact.
Another area where regulation may impact on the treasurer’s choices. Changes to the availability of pooling structures and regulatory change such as ring fencing in the UK, both mean that 2018 will be a good time to revisit your cash management structures and ensure that they are still efficient.
The OECD Base Erosion and Profit Sharing (BEPS) project is gaining traction. Treasurers will need to work closely with their tax colleagues to ensure that corporate structures are funded efficiently.
