The project is a comprehensive study of the changes in Accounting standard, the impact on financial statement with a study of Guinness Nigeria Plc Benin Branch, Edo state. This project is aimed at determining the impact of Accounting standard on the users of financial statement and also the needs of the Accounting standard. Data were collected, through primary and secondary sources. The finding revealed that the changes in Accounting standard play a vital role of the financial statement of the companies that adopted the change. Therefore, the impact of Accounting standard cannot be over emphasized hence it depends on the conferment of a given organizational setting from the conclusion of the study, it can be observed that there will be serious potentials for misunderstanding and suspicious resulting from information based on mix of conflicting accounting policies. It is therefore recommended that since international financial reporting standard has come to stay with thirteen standards already to its credit. Therefore one would expect that the standard should be applied on small scale business that are not quoted, and also non-compliance with accounting standard should not be seen only as a statutory offence but also as a criminal offence which can probably lead to closure of such business.
1.1 BACKGROUND OF THE STUDY
In recent years, there has been a lot of criticism about accounting standard and the impact of the recent changes in financial report they prepare. A lot of people have led to question the validity of the profit measuring procedures applied in arising at the profit disclosed in published accounting. Quite a number of proposal have been made in an attempt to reform the methods generally in used.
This has resulted in coming together of different countries with a view to working out modalities for the standardization of these profit measuring and reporting procedures.
The international accounting standard committee (IASC) produces international accounting standards (IAS) to be followed by all member countries, of which Nigeria is one of them. Also they also produce additional statement to accounting standard (SAS) in an attempt to make the international standard meet with the local condition with the aid of globalization and increasing demand for transparency. The (IASC) as reconstructed in 2001 by creating the international accounting standard board (IASB) among other changes.
A new set of rules, which would align Nigeria with other countries and also improve investors confidence was formed in May 2011 known as international financial reporting standards (IFRS) which was issued out by international accounting standard boards which is globally accepted specially IFRS are defined in compromise
- 13 in issue of the international financial reporting standard (IFRS) issued by IASB from 2001
- 29 is issue of international accounting standard (IAS) issued by IAS before April 2001.
- 15 in issue of interpretations originated from the international financial reporting standard international committee (IFRS IC)
- 11 in issue of the standard interpretation committee (SIC) statement, issued before April 2001.
The 13 IFRS in issue are:
IFRS 1 – First time adoption of IFRS
IFRS 2 – Share based payment
IFRS 3 – Business combination
IFRS 4 – Insurance contract
IFRS 5 – Non-current asset held for sale and discontinued operation.
IFRS 6 – Exploitation for and evaluation of mineral resources
IFRS 7 – Financial instruments disclosure
IFRS 8 – operating segments
IFRS 9 – Financial instrument
IFRS 10 – Consolidated financial statement
IFRS 11 – Joint arrangements
IFRS 12 – Disclosure of interest in other entities
IFRS 13 – Fair value measurement.
This work intends to analyze and examine the impact of these standards, the financial statement with particular emphasis on Guinness Nigeria Plc Benin, Edo state.
1.2 STATEMENT OF THE PROBLEM
Good accounting practice means that the account must be in accordance with the international financial reporting standard (IFRS), and the international accounting standard (IAS). The impact of accounting standard in the finance statement of an organization cannot be over emphasizes.
Moreover, the problem can be summarized below:
a. Lack of personnel with adequate knowledge of accounting standard is a major issues affecting the changes.
b. Lack of infrastructures and equipment which help to obtain most accurate information and report.
c. Inadequate accounting standard applied on financial statement to provide information for its users.
d. The problem of poorly designed accounting system in organization
e. The effect if faulty financial statement and report and the analysis produced by the management towards the achievement of the organizational goal.
f. The effect of financial statement and report which are not prepared at the appropriate tine.
g. Ineffectiveness of financial statement due to its improper application.
1.3 OBJECTIVE OF THE STUDY
The objective of this research work is intended to do the following:
A. To revealed that the changes in accounting standard play a vital role on the financial statement of the companies that adopted the changed.
B. To determine information about the changes in the net resources of the business organization
C. To find out if accounting standard is cumbersome and create problem.
D. To determine whether accounting and financial statement enhance accountability, transparency and improve quality to financial results of the organization.
1.4 RESEARCH QUESTION
The following are research questions postulates to guide the study.
- What impact has this standard made on Nigeria economy?
- How adequate is this accounting standard that is been applied in the financial statement helping to provide information to its users?
- How necessary is the adopting of the accounting standard in the preparation of financial statement?
- Of what importance is the extent of compliance in the preparation of the financial statement of an organization
- To what extent has the change in the accounting standard help to harmonize and improve the accounting standard?
1.5 RESEARCH HYPOTHESIS
The following hypothesis were formulated in order to determine the validity and reliability of the study.
a HO: The changes in accounting has no impact on the financial statement.
Hi: The changes in accounting has impact on the financial statement.
b Ho: Adoption of the accounting standards does not help in the standardization are harmonization of financial statement
Ho: Adoption of the accounting standards help in the standardization are harmonization of financial statement
c Ho: it is of no importance to determine the extent of compliance of some organization in the preparation of the financial statement.
1.6 SIGNIFICANCE OF THE STUDY
The accounting standards are developed to ensure higher degree of standardization in the published of financial statement. They provide the necessary information about how accounting information should be presented in order to enhance the value of its content and facilitated through understanding.
The significance of this study to the academic world cannot be over emphasized. It is of benefit to all users of accounting information who need to interprets and use proper understanding of the financial standard and the information so derived in making management decision for the interest of the organization.
Another most importance of the study is to reveal to the management of (Guinness Nigeria Plc Benin, Edo state) on the standards in financial statement and also an accounting guides to staff of the organization
Lastly, this study would also serve as reference literature to further researchers on the changes and impact of accounting standards.
1.7 SCOPE / DELIMITATION OF THE STUDY
Despite the fact that the study is based on the impact of accounting standards in financial statement. It also covers the importance of the standard, application, compliance thus the need for the standards and also the main aim of this standardization.
The limitation is as a result of limited time, insufficient fund available with the researcher and limited source of material. Restriction of some vital information about the company with a response of confidential issue.
1.8 DEFINITION OF TERMS
Standards: The simply means the regulations governing the use of financial statements.
Changes: This simply means the process of becoming different form he former state.
Fair values: The price that would be received to see and asset or paid to transfer a liability in an orderly transaction between market participants at the measurement data
Financial statements: These are statements used in recording financial transaction of any balance sheet of business.
Joint Arrangement: An arrangement of which two or more parties have joint control.
Financial instrument: A document that has a monetary value or represents a legally enforceable agreement between two parties e.g shares.
Accounting: The development and use of a system for recording and analyzing the financial transactions and financial status of a business or other organization.
REVIEW OF RELATED LITERATURE
Prior to the information of the international accounting standards committee (IASC) on 29th June, 1993, by a group of pioneer accounting bodies in united kingdom, united state of America, Australia, Canada, France, Germany, Japan, Mexico, the Neither land and Island.
Merge (1979) says that there existed differences both inform of these accounting standards. It was in the light of these differences that the international accounting standards committee (IASC) come with their objective to harmonize these standard and made their application world-wide.
Amore (1986:16) says that the standards issue by the (IASC) however, does not meet our local conditions environment, thus the need for Nigeria to have local accounting setting body that would give due economic environment when setting these standard become necessary.
Further, Falyse (1984:22) stressed that if accounting standards are to contribute effectively to the accounting development and business environment effort, they must be turned to our social legal and business environment.
However, with the global movement towards single financial reporting standard, the previous initiative of the Nigeria accounting standards Board (NASB) Now replaced with financial Reporting Council (FRC) of Nigeria with convergence with international financial reporting standard (IFRS) by adaptation. Nigeria IFRS road map was released in 2010 and recommended them to adopt the IFRS in Nigeria from 2012
2.2 THEORETICAL FRAMEWORK
It is obvious that accounting standards are important ot all users of the statement of accounting and allied course as they are usually subject of examination it is obvious that the users of accounting standards.
A PREPARES ACCOUNTING INFORMATION: Preparation of accounting information includes:
a. The financial statement
b. The auditor
The financial accountant who may be acting in the capacity of chief Accountant prepares the annual accounts of the organization with attempts of complying with the accounting standards.
The auditor must audit the financial statement prepared by the financial accountant and find out if the statement complies with specific requirements of the accounting standards and the express his opinion as to whether the financial statement shows a true and fair view or not.
B. USE OF ACCOUNTING INFORMATION: accounting information provided by financial statement is used by various people. This group of users needs the knowledge of accounting standards to have through understanding of the financial statements.
i. Management: They use the standard to get better understanding of the financial statement for analyzing the organization’s performance and position and taking appropriate measures to improve the company results.
ii. Creditors: The include both present and potentials ones for determining the credit worthiness of the organization. Terms of the credit are set by creditor according of the assessment of their customers financial health. Creditors include suppliers as well as lenders of finance such as banks.
iii. Investors: For analyzing the feasibility of investing in the company. Investors want to make sure they can earn a reasonable return on their investment before they commit and financial resources to the company. Example lenders and debentures holders.
Other users of financial statement include banks financial analysts economists and statistics.
2.3 CURRENT LITERATURE REVIEW
The IASB (International accounting standards Board) is an independent group of 14 experts with an appropriate mix of recent practical experience in setting accounting standards, in preparing. Auditing, or using financial reports and in accounting education.
The international accounting standard Board IASB members are responsible for the development and publication of IFRS including the IFRS for SME’s. the IAS is also responsible for approving interpretations of IFRS as developed by the IFRS interpretations committee (formerly IFRIC.
All meeting of the (IASB) follows a thorough open and transparent due process of which the publication of consultative documents such as discussion paper and exposure drafts for public comment is an important component.
The (IASB) engage closely with stakeholder around the world including investors analysts, accounting standards letter and the accounting profession the IFRS interpretation committee comprises 14 voting members appointed by the trustee’s and drawn from a variety of countries and progression background.
The financial reporting council has been pre-occupied with exposure drafts and the issues of international facilities, reporting standard. To date Nigeria has 13 accounting standards wholly developed to suit the economic environment.
IFRS – 1 FIRST TIME ADOPTION OF IFRS
A first time adoption of international financial reporting standards (IFRS) is to ensure that an entity’s first (IFRS) financial statements provide high quality information that is transparent and comparable over all periods presented, is a suitable starting point for accounting under IFRS and can be generated at a cost that does not exceed its benefit to users.
Disclosures in the financial statement of a first time adopter:
IFRS I requires disclosures that explain how transition from previous GAAP to IFRS affected the entities of financial position, financial performance and cashflows (IFRS)
1. The classification of the combination as an acquisition of a uniting of interests is not changed.
a At the data of open IFRS balance sheet
b The end of the last annual period reported under the previous GAP (for an entity adopting IFRS for the first time in its 31st December 2009 financial statement, combination would be as of 1st January 2008 and 31st December 2008).
2 The assets and liabilities acquired or assumed in the combination that were recognized under previous GAAP are recognized the acquirer’s open IFRS balance sheet, unless recognition is not permitted by IFRS.
3 Assets acquired and liabilities assumed in the combination that are measured at fair value under IFRS are restated to fair value on the opening IFRS balance sheet.
4 The deemed cost of assets acquired and liabilities assumed in the combination is the carrying values under the previous GAAP immediately after the business combination.
5 Assets and liabilities that were not recognized after the business combination under the previous GAAP are recognized on the opening IFRS balance sheet only if they would be recognized in the acquired entity’s opening IFRS balance sheet.
6 Goodwill written off directly to equity under previous GAAP is not reinstated as an asset on transition to IFRS. It is also not taken to the income statement as part of any subsequent gain or loss on disposal of the subsidiary.
7 Goodwill recognized as an asset under previous GAAP is only adjusted on transition in specific circumstances, including recognition of an intangible under IFRS that not recognized under previous GAAP, reclassification of an intangible to goodwill that was recognized under previous GAAP that does not quality for recognition under IFRS, or an impairment loss at the date of transition.
IFRS 2 – SHARE BASED PAYMENT
This standard is applies when a company acquires or receives goods and services. For equity-based payment. These goods can include inventories, property, plant and equipment, intangible assets, and other non-financial assets. The arrangements that would be accounted for under IFRS 2 include call options, share appreciation rights, share ownership schemes and payments for services made to external consultants based on the companies equity capital.
IFRS 2 DISCLOSURE REQUIREMENTS
This standard requires various disclosed requirement to enable the users of financial statements to understand:
- The fair value of the options will be calculated at the date the options are granted.
- This fair value will be charged to profit or loss equally over the vesting period, with adjustments made at each accounting date to reflect the best estimate of the number of options that will eventually vest.
- Shareholders equity will be increased by an amount equal to the charge in profit or loss. The charge in the income statement reflects the number of options vested.
- IFRS 3 – BUSINESS COMBINAITON
A business combination is a transaction or event in which acquire obtains control over a business. The accounting standards IFRS 3 sets out definitions and requirements for information to be given by entities about business combination and their effect. The business combination must be accounted for by applying the acquisition methods.
STEP 1: Identity the acquirer
STEP: Determine the acquisition date
STEP 3: Recognitions, and measurement of Assets, liabilities and noncontrolling interest (NC1).
STEP 4: Recognitions and measurement of goodwill or gain on purchase bargain.
IFRS 3 does not apply to
- Formation of a joint ventures
- Acquisition of an assets that is not a business
- A combination of entities or business under common control.
IFRS 4 – INSURANCE CONTRACT
Insurance contract is a contract under which one party (the insurer) accepts significance insurance risk from another party (the policyholder) by agreeing to compensate the policyholder of a specified uncertain future event (the assured event) adversely affects the policyHolder)
IFRS 4 applies virtually to all insurance contracts (including reinsurance contracts) that an entity issue and to insurance contracts that it holds (IFRS 4.2) it does not apply to other assets and liabilities of an insurer such as financial assets and financial liabilities within the scope of IAS 39 financial instruments, recognition and measurement
The standard acquires the disclosures of information that helps users understands the amount in the insurers financial statement that arises from insurance contracts .
i The effect of changes in assumptions
ii Accounting policies for insurance contracts and related assets, liabilities, income and expenses.
iii It the insurer is recent, certain additional disclosed are required.
b Information that helps users to evaluate the nature and extent of risk arising from insurance contracts
c The sensitivity to insurance risk concentrations of insurance risk.
d Actual claims compared with previous estimates IFRS S – NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUES OPERATIONS.
It a non-current asset is held for sale, the economic benefit of the asset is obtained through the assets sole rather than through it continuous use in the business (future economic benefit) such asset cease to be depreciated as they areas longer being consumed by the business moreover, an asset held for sale is valued at the lower of either.
The asset carrying cost or the asset fair value less the cost of selling this asset for sale there are certain conditions that must be satisfied.
Discontinued operation in a component of an enterprise that has either been disposed of an enterprise that has either been disposed of or classified as held for sale.
IFRS 5 is to specify the accounting for assets held for sale and the presentation and disclosure of discontinued operation.
Disclosures (IFRS 5.41)
- Description of the non-current asset or disposal group
- Description of facts and circumstances of the sale (disposal) and expected timing.
- Impairment losses and reversals, if any and where in the statement of comprehensive income they are recognized
- It applicable, the reportable segment in which the non current asset (or disposal group) as presented in accordance with IFRS 8 operating segments
- IFRS 6 – EXPLORATION FOR AND EVALUATON OF MINERAL RESOURCE
Exploration for and evaluation of mineral resources means the search for mineral resources including mineral oil, natural gas and similar non regulative resources after the entity has obtained legal rights to explore in a specific area, as well as the determination of the technical feasibility and commercial viability of extracting the mineral resources.
Exploration and evaluation expenditures are expenditures incurred in connection with the exploration and evaluation of mineral resources.
IFRS 6 permit an entity to develop an accounting policy for recognition, exploration and evaluation expenditures as assets without specifically considering he requirements of paragraph II and 12 of IAS 8: accounting policies changes in accounting estimates and errors.
IFRS 6 exploration for and evaluation of mineral resources paragraph 23-25 set out a number of specific disclosure requirements.
- To disclose information that identities and explains the amount recognized in its financial statement arising from the exploration of mineral resources.
- Accounting policies of exploration and evaluation expenditure including the recognition of exploration and evaluation assets.
- The amies and income and expense and operating and investing cashflows arising form he exploration and evaluation of mineral esource.s
IFRS 7:FINANCIAL INSTRUMENTS: DISCLOSURES
IFRS 7 Sets out disclosures of financial statement the presentation, recognition and measurement of financial instruments are the subjects of IAS 32 financial instrument recognition and measurement
Information that enables users to evaluate the significant of financial instruments for the entity financial position and financial performance.
i Information the enable users ot evaluate the significant instrument.
ii The nature and extent of risk arising from state to which the entity is exposed at the end of the reporting period.
iii Including information about now the entity manager it exposures for the financial risk.
1 Qualitative information about exposures to risks arising from financial instruments, including specified credit risk liquidty risk and market risk.
- These disclosures provides information about te extent to which the entity is exposed to risk, based on information provided internally to the entiry key management
IFRS 8 – OPERATING SEGMENTS
IFRS 8 defined an operating segments as follow, it is a component of an entity that:
i. Engages in business activities from which it may earn evenues and incure expenses.
ii. Its operating result are reviewed regularly by the entity” chief operating decision maker ot decision about resources to be allocated to the segment and assets it is performance.
IFRS 8 applies to the separate or individual financial statements of an entity (and to the consolidated financial of a group with apparent)
iii. Whose debt or entity instruments care traded in public market.
iv. That files is in the process of falling, it consolidated financial statements with securities commission.
1. General information about how the entity identified its operating segments and the types of products and services from which each operating segments derives it revenues.
- Inforamton about the rported segment profit or loss including certain specified revenues and expenses included in segment profit or loss segment asets segment liabilities and the basis of measureme.t
- Information about transaction with major customers
IFRS 9 – FINANCIAL INSTRUMENTS
IFRS 9 financial instruments set out the recognition and measurement requirements for financial instrument and some contracts to buy or sell non-financial instrument items.
Initially, all financial instruments are measured of fair value phis or minus, in the case of a financial asset or financial liability nor at fair value through profit or loss transaction costs.
Subsequently IFRS 9 divide all financial assets that are currently in the scope of ISS 39 into two classifications – those measured at amortized costa and these measured at fair value.
IFRS 9 amends some of the requirements of IFRS financial instrument. Disclosures including added disclosure about investment in equity instrument.
IFRS 10 – CONSOLIDATED FINANCIAL STATEMENT
A consolidated financial statement is a financial statement of a group in which assets, liabilities, equity. Income expenses and each of the parent and it subsidiaries are presented as those of a single economic entity.
The aim of IFRS 10 is to establish principles for the preparation and presentation of consolidated financial statements when an entity controls one or more other entities. Accounting reuiement for preparation of consolidated financial statements are: A parent prepares financial statements using inform accounting policies for like transaction and other events in similar circumstance (IFRS 10:19).
However, a parent need not present consolidated financial statement if it meets all of the following conditions (IFRS 10:49)
i It is a wholly – owned subsidiary or a partially owned subsidiary of another entity and its other owners, including those not other wise entitled to vote, have been informed, about and do not object to the parent not presenting consolidated financial statements.
ii It’s ultimate or any intermediate parent of the parent produces consolidated financial statements available for public use that comply with IFRS .
iii It did not file, or is it in the process of filling, its financial statement with a securities commission or other regulated organization for the purpose of issuing any class of instrument in a public market.
There are no disclosure specific in IFRS 10.
IFRS 11 – JOINT ARRANGEMENTS
A joint arrangement outlines an accounting by entity that jointly control an arrangement. The core principles o joint arrangement is that a party of a joint arrangement determines the types of joint arrangement in which it is involved by assessing its right and obligations and accounts for those rights and obligation in accordance with that type of joint arrangement.
A joint arrangement can be a joint operation on a joint venture.
There are no disclosure specifies in IFRS 11
IFRS 12 – DISCLOSURE OF INTEREST OTHER ENTITIES
IFRS 12 disclosure of interest in other entities is a consolidated disclosure standard requiring a wide range of disclosures about an entity’s interest in subsidiaries front arrangement, associates and unconsolidated structured entities.
Disclosure ae presented are series of objective with detailed guidance on satisfying those objectives:
IFRS 12 disclosure information enables users:
- To evaluate the native off, and risk associated with its interest in other entities.
- To evaluate the effect of those interests on its financial position, financial performance and cashflows where the disclosue of IFRS and IFRS do not meet the above objectives, and entity is to disclosed whatever additional information necessary.
- IFRS 12 is required to be applied by entity that has an interest in these
ii Joint arrangements
iv Unconsolidated structured entities
The disclosures are those main requirements of IFRS 12.
IFRS 13- FAIR VALUE MEASUEMENT
IFRS 13 fair value measurement applies to FIRS that requires on permit fair value measurement or disclosures and provides a single IFRS framework for measuring fair value and requires disclosure about fair value measurement. The standard sees value of the basis of an “exist price” notion and uses a fair value hierary which results in market based, rather than entity specific measurement.
MEASUREMENT OF FAIR VALUE
The objectives of fair value measurement is estimate the price at which an orderly transaction to sell the assets or transfer the liability would take place between market participants at the measurement date under current market condition.
i The particular assets and liability that is the subject of the measurement.
Ii For a non-financial asset, the valuation premise that is appropriate for the measurement.
iii The principal market for the asset or liability
iv The valuation techniques appropriate for the measurement considering the availability of data with which to develop inputs that represents the assumptions that market participant would be use when pricing the assets or liability and the level of fair value hierarchy within which the inputs are catergoriezed.
IFRS 13 requies an entity to disclose information that helps users of its financial statement assets.
- For assets and liabilities that are measured at fair value on a recurring on nonrecurring basis in the statement of financial position after initial recognition, the valuation techniques and inputs used to develop those measures.
- Fair: Value measurements using significant unobservable inputs (level 3) the effect of the measurements on profit or loss or other comprehensive income for the period .
2.3 MODLES AND THEORIES RELEVANTS TO HE RESEARCH
In order ot allow for effective implementation of IFRS adoption in Nigeria, the former regulatory body in charge of monitoring the reporting system was in (2011) restructured from Nigeria Accounting Standards Board (NASB) ot financial reporting council fo Nigeria (FRC). Financcial reporting council of Nigeria is now the body corporate solely responsible for the issuancse, monitoring and review of accounting and Auditing standard in Nigeria. The council is empowered under section 52 (1) of the Act ot adopt and keep up-to-date accounting and auditing standards, and ensure consistency between standards issued under international financial reporting standards (IFRS) as provided under part VII of FRC Act 2011 which dealt with review and monitoring of standards. This is one of the major developments brought by FRCN Act in (2010, where federal executive council approved the adoption of IFRS as the reporting framework to publicity quoted entities by 2012 in Nigeria.
Hence forth, the council (FRC) will only be reviewing, monitoring and issuing standards to ensure consistency with the requirements of IFRS – framework. This all standards to be issued or reviewed by the council should be in consistent to (IASB) guideline for global reporting, given due consideration to our peculiar customs, business environment, laws and level of economic development. However, the Act does not specify or restrict he extent of compliance as to the regard. Rather, same section 55(1) emphasized that “in the exercise of its powers for developing and issuing standards, a directorate of the council shall adopt the following procedures while issuing a new standard.
a. Identity accounting auditing or financial reporting issue that require standardization, prepare and publish exposure draft, conduct a public hearing where necessary and prepare a draft statement of accounting standards
b. Ratify such statements of accounting auditing and financial reporting standards prepared in accordance with this section.
c. Thereafter the statements of accounting auditing and financial reporting standards shall be published.
From the above discussions on FRCN activities, its clear that most of the issues rose in favour of IFRS are just attempts to show how Nigeria is serious in the light of the compulsory implementation of IFRS.
Although regulatory framework of financial reporting council of Nigeria (FRC) is potentially strong to support the ongoing mandatory adoption of IFRS Oduware (2012) argued that, some still consider IFRS for accounting and its implementation lies with the finance function of companies. However IFRS is more than accounting rather it is all about the way and manner in which and entity conducts its business after giving consideration to its accounting and financial reporting implication
Obazee (2012) agreed with the view of who opined that, conversion of IFRS is more than an accounting exercise and will have and effect outside the finance function in areas such as: Information technology, human resource, and investor relations. It also has a regulatory implication which is not limited to capital adequacy for bank, and solvency margins for insurance, but it also affects capital management for all entities
2.4 SUMMARY OF LITERATURE REVIEW
To summarize one of the theoretical benefits of annual reports and accounts published by companies and corporation in Nigeria and all other significant industries commercial and service enterprises operating in Nigeria and expected to comply with the international financial reporting standard.
Obazee (2012) agreed with the view of who opined that, conversion to IFRS is more than an accounting exercise and will have and effect outside the finance function in areas such as: information technology, human resource, and investor relation: it also has a regulatory implication which is not limit to capital adequacy for bank, and solvency margins for insurance but it also affects capital management for all entities.