Gert Palmans’ Post

CERTA advocaten More frequent invocation of new law to avoid bankruptcy. More entrepreneurs with corona debts start WHOA proceedings. As the Dutch tax authorities insist on repaying corona debts, more and more entrepreneurs are invoking a new Dutch legislation to avoid bankruptcy. The new Dutch law, known by its abbreviation WHOA, prevents creditors from obstructing repayment arrangements and allowing them to file for bankruptcy. Do you have questions about the WHOA? Then feel free to contact our WHOA specialist Seerp Gratama.

For 16 consecutive months now, the number of bankruptcies in the Netherlands has been surging. In August alone, a total of 308 companies, institutions, and sole proprietors faced insolvency, according to data from CBS. The transportation sector, in particular, has seen a steep increase in bankruptcies, mostly due to decreasing revenue levels within the industry, dropping by 5% in Q2. With a profound understanding of this sector's complexities, ACE Advisory specializes in addressing the unique financial needs of the transportation industry. We offer tailored financial solutions designed to optimize operations, strengthen financial strategies, and uncover growth opportunities. #FinancialAdvisory #TransportationIndustry #BusinessResilience #ACEAdvisory https://lnkd.in/e4mjVMm5

Greetings, In this post, our focus is on reinsurance contracts. Thanks to IFRS 17, we have transitioned to a reporting structure where obligations related to reinsurance contracts are now measured and accounted for specifically. As a natural consequence of this need, actuarial function authorities have either already seen or will soon see emails with the attachment "Reinsurance_Actuarial_Data_Requirement.xlsx" forwarded from "tool" consultants to project managers and then directly to actuarial functions. Regarding such requests, the initial approach is usually "let's extract this data somehow, review it, and add improvements to our task list." As we approach the official reporting date, I believe it is beneficial to take these reviews and improvements off the shelf. Frankly, I think that the potential impact of this new requirement introduced by IFRS 17 on the routine business processes of actuarial functions has not been experienced enough. When complex reinsurance programs, the necessary data for our models that should be created within the scope of these agreements, and especially the portfolio levels and sub-components preferred by companies under IFRS 17 are compared, it becomes more understandable what is expected of actuarial functions. I am sure that we can already build models that produce "best estimates" for the risks related to these contracts, taking into account the probabilities of these risks occurring. However, I wanted to share two publicly available studies that I believe could be beneficial to have on hand when constructing actuarial models for some reinsurance contracts that have been elaborated on contract details and are expected to come into play under certain conditions and at specified intervals. Before delving into the studies, a note: You will notice that these two studies are quite old for today. I believe they could be a useful starting point for those who are new to the subject. If you have more recent and publicly available similar resources that you benefit from, I would appreciate it if you could share them. In summary, we have entered a period where our estimates of reinsurance contract obligations will be more prominently featured in the financials. So, do you think our models are sufficiently prepared for this?

TP benchmarking and selection of comparable companies - Application of 10 times turnover filter while selection of comparable companies is usually practiced, however whether the approach undertaken is a valid approach? I wonder sometimes what is the multiplier that can be considered for application of turnover filter? How 10 times multiplier was decided, why not 20 times multiplier, or 15 times multiplier or ‘n’ number of multipliers! Lets say by adopting 10 times turnover filter the international transaction may be concluded to be not at arm’s length, however by application of lets say 20 times turnover filter, the same margin earned may result into Arm’s length margin. In my humble personal opinion, prima facie the turnover filter seems to be appropriate filter, but if dwelt upon the above thought, I beg to differ at times. Recently while going through judgement of DNV Business Assurance India Private Limited (ITA 2134/MUM/2022), the hon’ble tribunal has held that the turnover filter cannot be applied on the final list of comparable companies as it tantamounts to cherry picking. Even so when Assessee has applied minimum sales filter of 1 crore during the search process. Such 10 times filter if any should be applied during the search process itself. Basis the above rationale the approach of the TPO is disregarded whereby the TPO had removed two comparable companies from final list of comparable companies. The same are included by the Tribunal and Assessee’s appeal is allowed. ~Views personal