Accounting 

With Sofia it is possible to manage both single and multi-currencies accounting. The link with the company’s accounting system is obtained by inserting in the application one or more charts of accounts that are based on specifications provided by the Customer, and via the custom export of the accounting entries. 

Each portfolio is divided into sections that group together the financial instruments to which the local or IFRS 9 evaluation rules are applicable. To each section it is possible to link a chart of accounts that allows the association of specific accounting codes to every transaction. 

A transaction already registered and subsequently modified, can be automatically corrected at an accounting level via the management of the status of the transactions to be corrected. 

With Sofia it is also possible to simultaneously extract, onto distinct files, the accounting of several companies. A status is associated to each transaction that indicates its level of certification. Before being transmitted to the company’s accounting system, the entries generated by single transactions can be checked by means of the usual analysis tools of Sofia.

By using the Special Ledger it is possible to record the opening balances of the holdings at the beginning of each fiscal year and to memorize all the confirmed journals to extract balance sheets (organized by financial instrument or by accounting code) and to produce control reports with the entries present in the accounting system of the company.

This module allows the users to generate simulated closing journals and to export them without entering any transactions within the holdings.

It is the tool to support accounting closing and reporting processes, to manage several “closings” in succession, operated at different times and referring to the same date (e.g. end of quarter), using information, progressively more complete and reliable. 
Fast Close guarantees full traceability of the events belonging to each closing, with indication of the accounting closing phase to which each event belongs and the reconstructability of all the information (e.g. prices, exchange rates, data reference information) used to define the results.

Maintenance of financial asset portfolios according to the logic introduced by the IFRS 9 Principle on financial instruments, from a management and accounting perspective and support for IFRS 17 processes for life insurance products.
 

IFRS 9
IFRS 9 introduced important changes in the maintenance of holding balances (on the basis of original purchase lots) and in the area of impairment (stage allocation, ECL calculation). 
In Sofia it is possible to manage assets based on:

• four different methods of managing inventories that combine different methodologies for calculating holdings values and on the basis of breakdown of lots for stage allocation purposes (FIFO/FIFO, Average/FIFO, Average Pro-quota, Average Lot) 
• customizable and system-integrated SPPI test calculation procedures (with benchmark test calculation) or possibility to import externally calculated data
• calculation of stage allocation and ECL (12-month and lifetime) integrated into a system via dedicated formulas, risk data (risk indicators, probability of default curves, LGD) or imported from an external data source.

Asset Return for Insurance
The module supports the production of information requirements, relating to assets underlying life insurance products, for the purposes of IFRS 17 processes.
Specifically, for direct participation contracts, the Asset Return for Insurance module allows:

• obtain changes in the Company's share of the fair value of the underlying assets for Contractual Service Margin purposes;
• determine the impact on the income statement in case the Company apply the OCI option (mirroring).

The scope of the asset portfolios covered by the processes supported by the Asset Return for Insurance module relates to both Class C (Segregated funds) and Class D products (unit-linked, external funds, pension funds).

The general purpose of hedge accounting is to develop a system of accounting records that allows for greater harmonization over time of the effects of joint ownership of financial instruments and related derivatives, avoiding the typical income fluctuations that would result from applying the different accounting rules relating to each type of instrument taken individually versus the valuation rules provided for each GAAP.

The module supports hedging relationships focused on comparing either valuation values or cash flows, by allowing hedging relationships to be created and managed, and by identifying in the Holding screen the assets involved in the strategies.