Buy-Side Technology Awards 2017: Best Portfolio Accounting Platform—SimCorp

SimCorp has improved the way it handles P&L by enhancing the support of cost-basis adjustment.


Dimension, SimCorp’s flagship offering, embodies the firm’s acclaimed portfolio accounting solution, which provides users with access to a number of critical features. For example, the core design offers simultaneous support for multiple Tax, GAAP and Statutory standards, which, provides users with a set of positions and accounting figures for each of the aforementioned standards based on the same set of physical trades.

It is also an integrated front-to-back-office tool, allowing buy-side firms to enter a potential trade in the front office and immediately simulate the effect it will have on the firm’s balance sheet if executed. And, as a multi-currency system, it supports all asset classes and allows users to apply up to ten different accounting standards and tax schemes to the same portfolio without any data duplication. 

According to Paul Ravenscroft, product portfolio manager at SimCorp, this core support for multi-currency, multi-accounting regimes, is one of the most popular features, upon which SimCorp have more recently expanded by building the platform’s group currency accounting function, whereby transaction-by-transaction accounting in the parent company’s currency for subsidiary investments eliminates the traditional and cumbersome FX residual. Ravenscroft says that over the last twelve months, the solution has also undergone a variety of updates, such as the enhancement of handling defaulted securities. “We have increased the operational support for that process,” he says. “There is a more standardized operational flow, regarding write-offs, recovery, and restructuring.”

The firm has also improved the way it handles P&L by enhancing the support of cost-basis adjustment. “We can track certain balances of premium discount, cost and taxes, and separate out the amortization,” Ravenscroft explains. 

Regulations, in general, are one of the driving forces behind SimCorp’s changes to Dimension. Ravenscroft says that lately, they have seen significant tax reform affecting funds in Germany and having expanded its client base into Italy, the firm plans to implement support for a number of Italian Tax and GAAP regulations. 

Finally, for its US users, SimCorp is in the process of developing support for a new US GAAP standard—the Premium Amortization on Purchased Callable Debt Securities—which switches the amortization of premium to first call, and is planning to release an enhanced version of the platform that will include the accounting changes required for the US equivalent version of IFRS 9’s impairment regulation, the so-called current expected credit loss (CECL) standard. 

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