International Finance

Foreign Exchange Management& FAS 133 Accounting

Derivative accounting

TILLC assists clients establish clear hedging policies. All aspects of foreign exposure management are addressed:

• Foreign exchange exposure management and accounting,
• Interest rate fixed and floating analysis
• SWAP recommendations, execution and
• Accounting for FX and commodity hedging areas (copper, aluminum, natural gas, etc.).

TILLC assists clients navigate the complex nature of the FASB 133 & 138 standards, documentation of assumptions that help avoid auditor misinterpretation.

Since 2003, most major accounting firms have taken a defensive posture and assume clients have FAS 133 infraction's. PCAOB and the SEC have assigned a high profile to derivative accounting. Most auditors are unfamiliar with the complexity of the underlying transactions.

• Clients can utilize TILLC’s experience to navigate between the auditors ‘guilty as charged’ attitude and client accounting department indifference.

TILLC has worked through fact based FAS 133 analyses that limit auditor ‘disproving negatives’ scenarios.

Multilateral Netting

Multilateral netting is a powerful tool that improves operating margins by providing an efficient intercompany and third party payment mechanism. TILLC develops a client netting system that reduces: foreign exchange transaction cost, value dating delays, and transfer costs. A client netting system is utilized by both client manufacturing units and sales subsidiaries for efficient transaction cost while providing easy to reconcile accounting and control trails.

A multilateral netting process submits all intercompany and repetitive third party payments and foreign exchange transaction settlements through a client netting center, notionally creating a common currency, and then netting flows so that each subsidiary participant is either a net payer or receiver of funds in its local or functional currency. TILLC specifically assists clients establish an outsourced netting process that settles client transactions once a moth or more frequently and provides the client complete processing control. Savings are realized by client corporate Treasury and at each netting participant. TILLC assists clients as follows:

• Reviews client cross boarder transactions and develops transaction savings target
• Develops RFP’s for potential netting bank providers
• Develops customized client netting procedures and manual and monthly timetable.
• Arranges web based process for all transactions that can be transferred electronically to client general ledgers and to regional subsidiaries.
• Provides Sarbanes–Oxley control maps for all transaction steps that meet client authority delegations.

Multi-Currency Cash Pooling

TILLC can establish multi-currency cash pool system. The cash pool helps client make efficient use of their international subsidiaries cash and manage multi-currency deposits & loans on a fully hedged basis. The system works around a structure of non-resident currency bank accounts established by client designated subsidiaries at one central cash pooling bank. With a Cash Pooling system each client manages only the net daily to or from the cash pool. The result is client savings from an overall net lower interest expense and debt and cash positions. TILLC clients save significant interest spreads and reduce foreign unit unutilized cash. TILLC assists clients establish Cash Pooling as follows:

• Develop client feasibility study identifying savings and control benefits to be achieved by establishing a cash pool.
• Develops client subsidiary participant legal documents and mandates that comply with client control processes.
• Develop client process and procedure manual that is Sarbanes Oxley compliant.
• Prepare client how cash pool system enhanced savings for client multilateral netting and centralized FX hedging system.

Subsidiary liquidity

TILLC has arranged local debt facilities in:

• Asia Pacific: Australia, China, Hong Kong, India, Indonesia, Japan, Korea, New Zealand, Philippines, Singapore, Taiwan, Thailand, Vietnam
• Europe: Austria, Belgium, Bulgaria, Czech Republic, Denmark, Finland, France, Germany, Greece, Holland, Hungary, Ireland, Italy, Latvia, Norway, Poland, Romania, Russia, Slovakia, South Africa, Sweden, Switzerland United Kingdom, Ukarine
• MidEast: Dubai, Egypt, Lebanon, Saudi Arabia, Turkey
• Latin America: Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, Peru, Puerto Rico, Panama, Uruguay
• North America: Canada, and USA

TILLC has worked with local and multinational banks to provide clients with the local liquidity they need for their businesses. TILLC has established local banking facilities that supplement leading and lagging intercompany flows to maximize local liquidity. TILLC will assist in developing the proper amount of subsidiary liquidity.

Bank rationalization

TILLC has consolidated local country bank activity in many locations to streamline duplicate bank activity with local unit buy-in.

TILLC finds that the key to success is an open corporate / regional office / local unit dialogue on providing each unit its needed level of financial services.

TILLC develops templates outlining operating services that streamline client requirements. Bank service requirements are designed for client needs.

TILLC has conducted multi-bank streamlining in the following countries: UK, France, Germany, Denmark, Italy, Mexico, Brazil, China, HK, Singapore, Thailand, and Australia.