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Briefly, the KPI can be used by a large community of stakeholders, CFO, Advisors and Enterpreneurs whose need is to run their business. Interestingly, the path of sciense and technological evolution will involve also other actors like Tax Administration in using advanced technologies to monitoring tax risks, simply because will be accessible.
This news publication is the outcome of a long and deep research in the advancment of using KPI to reduce Tax Complexity and increase Transparency. And in fact it was not supported by Tax Scholars. However now, as long as the objective of Stakeholders is to work for ESG - Environmental Sustainability Governance - it is a good news that also Tax administration will be facilitated in a less complex environment and therefore able to save costs in the selection of companies on which to perform tax audits.
Withing this project XBRL Data Analytics Engine, it can be demonstrated that using KPI will be beneficial for Machine Learning. To that extend the system of UNIGIRO KPI could be also used as permissionless into monitoring provisions of deductibility of interest expenses based on KPI related with the Net Financial Position of the company and certain optimizations in the blocks.
Without entering in the details of the domestic Tax Law, with a sample of 20 different Domestic Tax Law provisions on Interest deductibility, the UNIGIRO KPI can optimise Machine Learning and Artificial Intelligence in a continuing process of learning both precision based on the tax provisions and also discrepancies due legislative misinterpretations in order to reduce complexity and therefore tax risks.
This consequence consists in the signaling importance of three specific financial statement Key Performance Indicators and their evolution from one tax year to another.
This field of research has been now extended involving academics and scholars.
UNIGIRO - MONITORING ENTERPRISE CREDIT RISK
The only XBRL Data Analytics Engine in Europe for monitoring business crisis and preventing financial and credit risks of companies with up to 100 Dynamic Indicators
Written by dott. Andrea Lupini - Scholar and Chartered Professional Accountant -
Research and studies on environmental sustainability in the light of the continuous and apparently unstoppable environmental and climatic damage endanger humanity and the future of humanity, in fact it was scientists who brought to the World Economic Forum already during the early 2000s the following questions to which a precise answer already had to be given:
WHICH ACTIVITIES ARE FINANCED BY BANKS AND THE BANKING SYSTEM?
Well, just a few days ago, the European Banking Association (EBA) introduced the missing piece publishing the ESG document on Environmental Social Governance, writing and placing a decisive attention that the banking system needs a system of KPIs to improve financial sustainability, implications and reasons are focused on a more broad sustainability touching the future of the planet earth.
The EBA emphasizes the importance of having a KPI Green Asset Ratio that is supported by other KPIs in order to understand how institutions finance sustainable activities in order to achieve the objectives of the Paris Global Agreement.
For some time now we have all been more attentive to climate change and to everything we can do to safeguard and improve our future and that of the planet. Investments must also go in this perspective, which from the first suggestions should no longer be evaluated solely and exclusively on the basis of the income that the activities can generate and therefore from a purely economic and financial point of view, but also from the point of view of financial sustainability and risk management with a strong focus on environmental, social and governance aspects. The EBA, the European Bank Authority that provides advice on key performance indicators, or KPIs, highlighted the need for a Green Asset Ratio (GAR).
The majority of investors are increasingly approaching investments that comply with the parameters mentioned above and set by the EU, the ESG criteria are as follows:
Criterion E - Environmental, is the parameter that refers to the environment, carbon dioxide emissions, the reduction of the use of natural resources and food safety.
Criterion S - Social, and therefore respect for human rights, equality, conditions in the workplace
Criterion G - Governance, concerns for example the diversity of the composition of the board of directors of a company, equal pay for men and women, the fight against all forms of corruption.
This last parameter is extremely important as it is the one by which external observers evaluate the company, through the ESG Rating the validity of a company is defined in relation to its environmental, social and governance commitment. The specialized agencies elaborate the sustainability rating through the data that are provided by the authorities, from the data provided by the companies themselves and also from public information.
The fact that investors focus on the sustainability of the companies in which to invest automatically leads them to have to evaluate systems that reduce waste and take into account all the consumption and needs of the company itself, therefore a company that uses renewable resources and reduces its consumption of energy, heating and water will certainly attract the attention of investors.
The EBA, the European Bank Authority that provides advice on key performance indicators, or KPIs, highlighted the need for a Green Asset Ratio (GAR).
The EBA has published an opinion in response to the request of the European Commission to provide the necessary advice on indicators and directives on which parameters a company must have to be defined environmentally sustainable with the EU taxonomy.
EBA elaborates the calculation methodology that the KPIs should possess as well as the qualitative information that will be provided through the KPIs themselves.
The main KPI proposed is precisely the GAR (Green Asset Ratio) which identifies the assets of the institutions that finance sustainable activities in line with the taxonomy of the European Union, in particular those in line with the European Green Deal and the Paris Agreement. .
The data collected by the GAR will have to be integrated with other KPIs that provide information on the taxonomic alignment of services and that are different from loans and investments. Therefore, an investment will be considered sustainable only when it is able to create value through an integration between financial and ESG analysis.
In this perspective of absolute need to monitor and above all to be able to effectively analyze the financial solidity of a company but also to be able to make a predictive analysis of the same in order to be able to assess and monitor the level of credit risk and the same financial risks it faces. the possibility for investors to use the UNIGIRO portal.
In fact, UNIGIRO uses an absolutely particular monitoring and analysis system, using as many as 100 KPI indicators for analysis alongside Artificial Intelligence, it turns out to be a high-tech budget analysis engine that manages to monitor and prevent the state of crisis and insolvency. of a company.
In fact, UNIGIRO analyzes all the data of the Chambers of Commerce by preparing detailed reports through an automated process in line with all the methods used most in the banking and private equity sectors.
With a view to continuous improvement, using Artificial Intelligence and with 100 KPI indicators - UNIGIRO is constantly evolving in order to provide its customers and investors with the best predictive analysis system with dynamic and non-static indicators in order to always provide analysis more detailed and reliable in real time.
In this regard, as we have been arguing here, we reiterate and evidence that the Credit Risk Management should be aware of using a wide range of indicators and it must use the UNIGIRO KPI for commercial and industrial activities.
The EBA - European Banking Authority published, in April 2020, the final version relating to the Guidelines on credit granting and credit risk monitoring, GLs LOM - "Loan Origination and Monitoring".
It should be noted that, despite the proposals and suggestions of the last twenty years starting from BASEL 2, BASEL 3, the financial and insolvency risks have not calmed down with the result that the great past financial damages have been paid to people through "unemployment "And" precarious work ".
Even the European Banking Association (EBA) affirms the common sentiment at the European level of the need to use advanced machine learning tools, which overcome the simplistic weighted calculations of Banks' Ratings and Advisory Ratings.
The substantive reasons with which the EBA, as confirmed in April 2020, advance in line with the vision anticipated in 2017 to use a system of KPI Standards and therefore to feed not only the information systems of Banks with SMART cognitive abilities are therefore very valid. allowing to understand the past credit risk, but also the possible, probable and future economic, legal and financial default.
The risk management analysis system is also provided for by the Crisis and Insolvency Code as early as 2019 (Insolvency Directive n.1023 / 2019). In this regard, an advanced SMART system already exists that goes beyond the mere understanding of Net Working Capital as the Banks did and goes beyond the simplistic use of a few indicators, such as the secondary liquidity index, even if it is a significant warning index of the situation. of crisis that is able to consider in a granular way the flows of the Revenue of the Companies thus guaranteeing the word "assurance" in terms of Credit Risk Management.
Therefore, technologies become the protagonists in the economic system to feed risk assessment and monitoring models (data quality) in terms of the significance of the analyzes, but above all of the truthfulness and reliability of the information used such as our XBRL Data Analytics Engine.
The big change will all be to the advantage of commercial, industrial, financial and insurance companies and therefore of the economic society, while taking into account the big mistakes made especially in the field of valuations.
UNIGIRO - MONITORING ENTERPRISE CREDIT RISK
The only XBRL Data Analytics Engine in Europe for monitoring business crisis and preventing financial and credit risks of companies with up to 100 Dynamic Indicators
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UNIGIRO is provider of Benchmark Key Performance Indicators
MONITORING ENTERPRISE CREDIT RISK: we can provide a Smart XBRL Data Analytics Engine Toolkit for Financial Risk Analysis to let Creditors and Investors monitoring company's creditworthiness and financial sustainability
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