The model has 3 worksheets. You need to update highlighted cells in “Inputs” sheets with your own company data. The final cash flow statement will be produced automatically for you in “Result” sheet. Go on, download the Excel file Here and give it a go.

Here’s how your cash flows should flow:

Step 1) I’m starting with my profit before tax (PBT) of $24,600. Then, I’m adjusting the PBT by removing/reversing all non-cash income and expenses. Non-cash expenses are added-back to the profit, and non-cash income is removed from the profit as follows:

You will notice above that I’m also removing finance income and finance cost. This is because they don’t necessarily show how much interest was paid or received in terms of cash. Remember, finance costs may include all the premium unwinding and discounts and effective interest rate adjustments.

Step 2) Above, we have arrived at $61,100 cash inflow from operating activities before working capital changes. Changes in working capital normally includes changes in your inventories, receivables and payables. Next, I go through my balance sheet and identify all assets and liabilities which have occurred neither from investing, nor financing activities (ignore equity and cash and cash equivalents!).

I have identified below assets and liabilities, which you can call as my operating assets and liabilities, and hence form part of my working capital. I calculate the effect of changes in working capital on my cash.

• Increase in inventories – You have spent cash to buy inventories.
• Increase in receivables – You have spent cash to extend further credit to your customers.
• Increase in payables – You have purchased more items for credit, hence you did not spend cash.
• Decrease in inventories – You have sold inventories, and received cash.
• Decrease in receivables – You have collected monies owed to you from debtors and received cash.
• Decrease in payables – You have paid to your suppliers and have spent cash.

Remember, amount you are showing as disposal on your PP&E movement may not necessarily be the same as the amount you receive from this sale. There may be some gains and losses from the book price. In my company, even though I’ve disposed-off my PP&E worth $12k on the balance sheet, I have $14k cash proceeds. The difference can be traced to my P&L, where I have $2k gain on disposal of property.

Step 5) Financing activities. Similarly, I’m showing actual proceeds and repayments, gross:

Arrivederci,

JU

If you have any questions, or suggestions, please comment below. If you are seeking professional advice email me at advisory@finspect.uz

The post Step-by-step cash flows (part 2: Excel model) appeared first on Finspect Advisory.

Just the way statement of equity is nothing but a table showing movements within equity, statement of cash flows is nothing but a table showing movements within cash [and its equivalents] during the accounting period.

What is cash and its equivalents (C&CE)?

IAS 7 (paragraph 6) defines cash as “cash on hand and demand [or current] deposits”. Cash equivalents are defined as “short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value”.

The term of cash equivalents should be less than 3 months. This is not 3 months from the balance sheet date, but total life/term of the contract or investment from the date of acquisition. Therefore, if you have a 6-month deposit with your bank, this would not be classified as a cash equivalent.

As long as the above definition is met, cash equivalents can include:

• Bank deposits
• Certificates of deposit (CDs)
• Money market instruments
• Corporate bonds
• Gilts and T-bonds
• Eurobonds
• Bank overdrafts [which are integral to your company’s cash management]

Even if you include your bank overdraft within your ‘cash and cash equivalents’ on your cash flow statements, you cannot normally include it within ‘cash and cash equivalents’ line on your balance sheet. On the balance sheet, the bank overdraft would be included within current liabilities. In the notes to financial statements, you would then state what items on your balance sheet form part of ‘cash and cash equivalents’ for the purposes of cash flow statement.

For an investment to be classified as cash equivalent, you should be able to withdraw the amounts at any time without paying significant penalties (such as early/premature withdrawal penalties).

Where your short-term deposit is with a party which exposes you to a significant credit risk (i.e. risk that counterparty fails to repay you), you cannot include this amount within cash equivalents. This is because the money would not be ‘readily convertible to know amounts of cash’.

Paragraph 7 of the standard specifically states that no equity investment can be classified as cash equivalent. This is because they normally have significant risk of changes in value.

Statement of cash flows

As I mentioned above, a statement of cash flows is a table showing and explaining the movement of your cash and cash equivalents during the year (i.e. reconciling opening with closing balance). This reconciliation should be broken down into cash flows from the following three categories:

1. operating activities;
2. investing activities; and
3. financing activities.

To severely oversimplify it, a cash flow statement would look like this:

What is included in cash flows from operating activities?

IAS 7 paragraph 6 puts it: “the principal revenue-producing activities of the entity and other activities that are not investing or financing activities”.

Reading cash flows statements are easy! From the above, you should be able to tell that company generates $400k-$500k a year, which can be used for your investment and financing activities.

• If the monies generated from operating activities are positive (like in the example above), this means that your company can maintain its operating capability and even support any cash needed for investing activities (such as purchase of PP&E, investment in bonds) or financing activities (such as payment of dividends, repayment of borrowings).
• If, on the other hand, the monies from operating activities are negative, this means that your company may need support from cash flows from investing activities (such as dividend income from your investments, sale/disposal of investments) or financing activities (such as raising cash through borrowings or share issue) to support its operating capability.

Cash flows from operating activities can be reported either using direct or indirect method. This should not affect the total amounts reported under each heading (operating/investing/financing).

To give you an oversimplified version of both direct and indirect methods for operating activities, I will expand on my previous example:

Although, direct method above seems easier to prepare and read, it may actually require a separate cash-based accounting system. Otherwise, you could work it out by adjusting your operating profits for non-cash items and changes in your working capital.

From my experience, most companies opt for indirect method of preparing cash flow statements. This is because it’s actually easier to prepare and it reveals less information (because it shows net receipts/payments, rather than gross).

Investing activities

IAS 7 paragraph 6 defines investing activities as “acquisition and disposal of long-term assets and other investments not included in cash equivalents”. You will need to include the following cash flows in your investing activities:

• Payments for purchase of PP&E, intangible assets and investment properties
• Proceeds from sale of PP&E, intangible assets and investment properties
• Payments for purchase of equity (including investment associates) and debt (including related party loans)
• Proceeds from sale of equity and debt investments
• Dividends received from your investments
• Payments for acquisition of subsidiaries, net of cash acquired
• Proceeds from sale of subsidiaries, net of cash disposed

Financing activities

Paragraph 6 puts it as “activities that result in changes in the size and composition of the contributed equity and borrowings of the entity”. So, include:

• Proceeds from and repayment of borrowings (other than overdrafts which are included as part of cash equivalents)
• Proceeds from issuance of shares and other capital contributions
• Purchase and sale of treasury shares
• Acquisition of and proceeds from disposal of non-controlling interest in subsidiaries
• Dividends paid

Excel cash flow statement model

In part 2 of this post (Step-by-step cash flows – Excel model), you can download your free Excel model, where I will give you guidance on how to use the model to easily prepare your IFRS compliant cash flow statements.

Yours,

JU

The post Step-by-step cash flows (part 1: guidance) appeared first on Finspect Advisory.

• Expenses by nature: depreciation, purchases of materials, transport costs, marketing costs, etc.
• Expenses by function: cost of sales, distribution costs and administration costs.

• Cost of inventories used in producing revenues. Cost of inventory would include direct costs related to purchase of materials, transportation from supplier to your production facility, and costs of production.
• Direct staff costs: such as production plant staff, but not staff costs of your, say marketing department.
• Direct depreciation charges: again, this would be depreciation of things like machinery, used for production, production floor, etc. Do not include depreciation of your office equipment.
• Any other relevant ad-hoc charges, such as external hire of equipment and staff.
• Include cash-backs or bulk discounts that you receive from your supplier. Do not include finance discounts though.

• Staff costs relating to sales and marketing departments.
• Marketing and advertising costs.
• Client entertainment.
• Storage costs for finished goods. This will include any rent and depreciation of your storage facilities. If storage facilities are shared for finished goods and goods in progress, you would need to allocate the cost between cost of sales and distribution costs proportionally.
• Costs of transporting inventory from production facility to sales floor, or to client.
• Fixed and variable costs relating to your sales floor. For example, your retail unit maintenance costs, fees paid for POS and CRM systems, etc.
• Agent fees and commission.
• Any other selling costs.

• Office expenses for admin staff, like HR, Finance, IT and general management. This will include both fixed costs such as rental and depreciation, as well as variables such as salaries, stationary and other consumables.

• Interest expenses on loans and borrowings.
• Intrinsic interest cost included within rentals in finance lease agreements.
• Mandatory / non-discretionary payment of dividends on shares classified as liability (for example preference shares). Read more about debt or equity classification (coming soon).
• FX losses on loans and borrowings.
• Unwinding of discounts or premiums arising from fair valuation of financial liabilities on initial recognition.
• Unwinding of discounts on long-term provisions.

The post What is included in cost of sales, admin and distribution costs? appeared first on Finspect Advisory.

In this post, I will tell you what IFRS financial statements look like, and in the next post (coming soon), I will help you prepare IFRS compliant financial statements from your trial balance.

IAS 1 is the standard that tells you what financial statements should look like, and what the minimum requirements are for each primary statement. Primary statements of IFRS compliant financial statements are:

• Statement of financial position (Balance Sheet);
• Statement of profit or loss (P&L or Income Statement) and other comprehensive income (OCI);
• Statement of changes in equity; and
• Statement of cash flows.

IAS 1 will also tell you what to include in the notes to the financial statements, comprising accounting policies and other explanatory information. A complete set of financials should also include comparatives in relation to prior period (e.g. last year). P&L and OCI can be presented as either one set or two separate statements.

Many students and even professionals I know are for some reason scared of cash flow statement! Most don’t even know how to read it. What if I told you that you can prepare cash flow statement with very simple step-by-step guide? I will teach you how to read the cash flow statement, so you can impress your boss, teacher, auditor, your client or a friend? Click here to navigate to your step-by-step cash flow guide (coming soon).

First things first

Make sure you include the following in your financial statements, as many times as required (companies usually include these as a header to each page):

• Company name (and previously company name, if changed recently);
• Tell readers whether this is consolidated FS of a group, or standalone company financials;
• Accounting period covered; and
• The currency and the units or the level of rounding in which the numbers are presented.

The BS requirements (by which I mean the balance sheet)

Make sure that you include these (as applicable) on the face of your balance sheet (IAS 1 paragraph 54,60):

The P&L

When you are presenting your P&L, make sure you classify your expenses consistently either by function or by nature (as required by IAS 1, paragraphs 100-103). Above P&L format distinguishes expenses by function.

• Expenses by nature: depreciation, purchases of materials, transport costs, marketing costs, etc.
• Expenses by function: cost of sales, distribution costs and administration costs.

Choose what is more relevant to your financials and do not mix expenses by function and nature.

Other comprehensive income (OCI)

OCI items should be classified by nature and grouped as follows:

• Items that may reclassified to P&L
• Items that will not be reclassified to P&L

­­Statement of changes in equity

This primary statement should basically show a reconciliation of each type of equity from opening balance to closing balance, something like the following:

Statement of cash flows

Many students and even professionals I know are for some reason scared of cash flow statement! Most don’t even know how to read it. Therefore, I decided to have a separate blog post especially for cash flows. Click here to navigate to your step-by-step cash flow guide (coming soon).

Notes and disclosures to IFRS Financial Statements

After 4 primary statements above, your financials should include notes comprising significant accounting policies and other information that may be relevant to understanding the financial information relating to your entity. I recommend that you follow the structure, similar to below:

1. First, talk about your entity, its operations, segments and main activities, the geography in which it operates, the main laws and regulations affecting the entity, etc.
2. Then, state whether these are consolidated group financial statements, and if so, list the subsidiaries, associates and identify their activities.
3. A statement of compliance with IFRS is a must (IAS 1 paragraph 4.15), so state that your financial statements are prepared in accordance with IFRS as issued by the IASB. Also tell your readers that you have prepared the financials with the assumption that the entity is going concern (coming soon). Or else, describe any uncertainty about the entity being going concern.
4. Give a summary of significant accounting policies. Start this with new and amended IFRS/IAS standards adopted by you during the year and how adoption of those affected your numbers.
5. Tell your readers what your presentation and functional currencies (coming soon) are.
6. Disclose information (usually done in table format, followed with some narrative) about components of each material item on your BS and P&L. For example, give breakup of your revenue streams, expenses, inventory, etc. To make everyone’s life easier, make sure you cross-reference information in the notes with numbers on the face of your BS and P&L.
7. Disclose transactions and balances with related parties! See my blog who is related party? (coming soon).
8. Disclose other information, not included on the face of your financials, such as contingencies and commitments, other uncertainties and off-balance sheet items and any significant non-financial information.
9. Give some sensitivity analysis relating to financial risks affecting your entity and describe your financial risk management policy, as well as the process for managing capital. Financial risk would cover market risk, credit risk and liquidity risk. Market risk would include such risks as forex, interest rate and market price risk.
10. Include any other information specific to your entity. Think of earnings-per-share (EPS) disclosures, discontinued operations, business combinations, offsetting financial instruments, assets pledged as security, and operating segments.
11. And in the end, disclose any subsequent events (coming soon) affecting your entity.

If you need help preparing your IFRS financial statements from your trial balance (coming soon), then move on to my next post.

Below are useful links to illustrative financial statements, which you can get off the net:

Yours

JU

The post So what are financial statements anyway? Presentation (IAS 1) appeared first on Finspect Advisory.

If you are new-ish to IFRS, and have literally 5 minutes to learn IFRS, then – learn the principles.

If you are new-ish to IFRS, and have more than 5 minutes, then – start with learning the principles.

If you are not new, then here’s a quick revision for you.

The laws of physics of IFRS is set out in the IASB’s ‘Conceptual Framework for financial reporting’. All new IFRS standards must comply with the Framework. And the need for Framework has arisen due to past events such as:

• Inconsistent guidance in accounting treatments within standards.
• Inconsistencies in application of prudence versus accruals/matching concepts.
• Standards are not comprehensive and do not (and of course cannot) cover all potential future and current accounting issues. Therefore, standards are argued to be ‘firefighting’ (i.e. issued after an accounting scandal). The Framework would on the other hand produce a set of principles to govern accounting issues, covered or not, by accounting standards (think… cryptocurrencies!?).

So, when you are thinking of posting an accounting entry tomorrow, if you simply and with good intention follow the Framework, you can’t go too wrong with IFRS. In contrast, with rules-based US GAAP you’d have to find the ‘debits and credits’ of your entry prescribed to you by the relevant standard.

How does the Framework ensure that financial information “in accordance with IFRS” is useful? Firstly, by providing comparability (with other companies and with past information), relevance (information is relevant to shareholders, creditors and other stakeholders), completeness (free from material error and omittance), verifiable, timely, and understandable.

Tomorrow, when you are posting that accounting entry, first identify where does your transaction or balance fit in within the following ‘5 elements of the Framework’:

1. Asset – a resource controlled by the entity as a result of past events, from which future economic benefits are expected to flow to the entity.
2. Liability – present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow of economic benefits from the entity.
3. Equity – a residual interest in the assets of the entity after deducting all its liabilities.
4. Income – the increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increase in equity, other than those relating to contributions from equity participants.
5. Expense – decreases in economic benefits during the accounting period in the form of outflows or depletions of assets or incurrences of liabilities that result in decreases in equity, other than those relating to distributions to equity participants.

I know, I know… I’m starting to use accounting language here. Let us go through the above definitions, this time in plain English.

Asset is:

• Resource: This can be both tangible (e.g. computer you are using) and intangible (e.g. certain software licenses that you have on your computer).
• Controlled by the entity [by you]: Not necessarily legally owned by the entity. Although, you probably legally own your computer, most Airlines don’t actually own ‘their’ airplanes but lease them from leasing/financing institutions. However, they clearly control the planes, don’t they? Hence for them, the airplanes in accordance with IAS 17 (Leases) (coming soon) are leased assets.
• As a result of past events: This can be purchase, a receipt of a gift, exchange of assets, or signing of a finance lease.
• Inflow of future economic benefits: A very important concept here is that an asset must be able to generate future economic benefits. Would you recognize an asset if you’ve paid last month’s salary to your staff, paid for your own lunch or repainted your office yellow? Probably not, as these costs would not bring future economic benefit to you.

On the other hand, if you pay next month’s salary to your staff in advance (de facto staff loan), buy food for reselling in your supermarket (inventory), or build a factory to produce computers, you’d debit your balance sheet and recognize asset. This is because inflow of future economic benefits is expected from these transactions.

Liability is:

• ‘Present’ obligation: Word ‘present’ here is easy to miss and ignore, but this word is as important to the definition of liability as any others. Present obligation does not mean, that the settlement is due now or on demand. A liability, like an asset, can be both current and non-current (e.g. long-term corporate bond due in 5 years).

I’ll give you an example of an obligation which is not ‘present’. If you bet $100 that Manchester United wins the premier league (which, let’s say is highly unlikely this year), you wouldn’t have a present obligation to pay me. However, if due to occurrence of unlikely events, it is now probable that Manchester United becomes the champion, then a present obligation occurs and you would create a liability (i.e. provision) for probable outflow of future economic benefits, in accordance with IAS 37 (Provisions, contingent liabilities and contingent assets) (coming soon).

• Present ‘obligation’: Obligation does not have to be legally or contractually binding obligation, like the $100 bet above (which was legally binding in many jurisdictions as we both verbally agreed).

Obligation can be ‘constructive obligation’. This is when you have indicated to others, through your actions, that you will accept certain responsibilities. As a result, you have created expectations that you will discharge those responsibilities. For example, if you’ve always paid bonuses to your staff in January, and again expect to pay bonus this financial year, you have a constructive obligation to pay bonuses and hence liability (provision), even though the obligation is not legal.

However, as obligation has to be present obligation, you cannot create provisions for future commitments (e.g. you cannot create a provision on this year’s balance sheet, with the intention of increasing staff salaries in coming years).

Equity is:

• Residual interest: As equity is defined as ‘nothing but a balancing figure’ between assets and liabilities, this highlights the highest importance given by the Framework to identify and measure all the assets and liabilities of the entity in accordance with IFRS. Equity can be divided into different types of capital and reserves. This is usually done to show legal restrictions of shares or differing rights of various equity-holders.

Income is:

• Increase in economic benefits: Well, there you go… this is called “the Balance Sheet approach”. Income is basically defined as an increase in assets or decrease in liabilities (that result in increase in equity).
• But, other than those relating to contributions from equity participants: i.e. equity contribution could potentially increase cash (and hence ‘assets’), but should not result in recognition of income, as this is a transaction with equity participants. You would just Dr. Cash and Cr. Equity (share capital) on receipt of cash from equity participants for issuance of shares.

Expense is:

• Decrease in economic benefits: Opposite of income, an expense is a transaction that would decrease assets or increase liabilities (that results in decrease in equity).
• But again, other than those relating to distributions to equity participants: i.e. dividend distribution could potentially decrease cash (and hence ‘assets’), but should not result in recognition of expense, as this is a transaction with equity participants. You would just Dr. Equity (retained earnings) and Cr. Cash when distributing dividends.

Underlying assumption – Going concern

The underlying assumption of the Framework is that financial statements are prepared on the basis of a going concern. That is, the entity will continue its operations for the foreseeable future. As an auditor, we used to assume that foreseeable future is 12 months from the date of audit opinion. Kind of short-sighted auditors!

Here’s my promise to write a post on going concern and how to prepare financial statements (coming soon) if your entity is no longer going concern (i.e. break-up basis).

Underlying assumption – Accruals

Another underlying assumption of the Framework is that income and expenses are recognized on an accrual basis. This is in contrast to cash-based accounting. The transactions should be recorded when they have occurred, regardless of when and whether they were settled.

A simple example can be staff bonuses paid after the financial year, but which relate to the results of the financial year just ended. Even though cash outflow was in January 2019, the expense in this scenario should be recorded for the financial year ended 31 December 2018. This is consistent with the recognition of the liability for staff bonuses (remember constructive obligations?) as at 31 December 2018.

And finally – Materiality

You must have heard of the phrase “free from material error”. Well the concept of materiality in IFRS is to define a threshold to determine whether items are even relevant. The Framework (paragraph QC11) defines materiality as follows:

“Information is material if omitting it or misstating it could influence the decisions that users make on the basis of financial information about a specific reporting entity. In other words, materiality is an entity-specific aspect of relevance based on the nature or magnitude, or both, of the items to which the information relates in the context of an individual entity’s financial report.”

Now, it’s a judgement call here. But you can use the following as a starting point:

• 5% to 1% of total revenues;
• 1% of total assets;
• 2% to 5% of net assets;
• 5% of net profit.

And of course, certain items can be qualitatively material to the financial statements, regardless of their size. Examples of such items are disclosure of [dodgy] related party transactions and balances, transactions that could change net profit to net loss, net assets to net liabilities, etc., legal cases and other non-compliances and many more.

Bonus – What the Framework does not tell you

I’ll add one more guiding principle which is an underlying concept in IFRS – Substance over form. The Framework does not identify ‘substance over form’ as one of its principles, but it will have a special place here, at least in my blog.

Transactions and balances recorded in the financial statements should reflect their economic substance and reality, not their mere legal form. You see this everywhere in IFRS, but IAS 17 (Leases) is the easiest standard which I can point out to. If you go to your bank and agree a contract to sell-and-leaseback your home for 25 years with an option to buy-back at a discounted price, you are getting into a financing transaction (i.e. loan). Therefore, even though legally you sell your home, and it no longer is yours, in IFRS you would never ‘de-recognize’ it. You would recognize the liability in the form of finance lease payable to the bank, and would recognize cash received from the bank as asset. See IAS 17 (Leases) (coming soon) to learn more about this standard.

In the Framework, IASB refers to the above as faithful representation of transactions.

And, there you go. You have completed your learning of IASB’s conceptual framework. Remember(!), your aim in preparing financial statements should be true and fair representation of economic substance of your entity. This requires transparent, high-quality, consistent, relevant, complete, and unbiased financial information that is timely, comparable and verifiable.

Yours,

JU

The post Where do I start? The Framework of course! appeared first on Finspect Advisory.

In the past couple of years, I see a lot of changes in the world of financial reporting, be it IFRS, US GAAP or some other local GAAP. The most notable ones are introduction of new revenue, financial instruments (including impairment), leases and insurance standards. These are the most complex standards in financial reporting. Although, not all of these standards may affect you, the ones that affect are likely to impact your P&L and balance sheet numbers significantly (and I haven’t even mentioned the immense effort to prepare transitional disclosures that are required by these standards!).

Just when you think that this must be it, current business and tech environment throws a new challenge to the accountants worldwide, with … bitcoins! Currently, no GAAP has an accounting standard for cryptocurrencies (or even fancier ‘crypto-assets’). Some account for them as cash, some as inventory, and some as financial instruments (think about consequences of different accounting treatments on their measurement and hence your financials!). Thank you, Satoshi Nakamoto, for making the lives of accountants and auditors a nightmare!

These are not the easiest times for accounting professionals and students worldwide. We must keep ourselves updated all the time.

So, what and who is driving the changes?

Well, a number of factors:

1. Accounting scandals (think Enron, WorldCom, and Madoff). See my analysis here (coming soon) of how poor governance and loopholes in financial reporting led to recent accounting scandals.

2. Standard setters. IFRS and US GAAP have been trying to converge for ages now and they had a deadline of 2015. As I’m writing this blog, it’s almost 2019 outside, and guess what? Read my post on why haven’t IFRS and US GAAP merged!? (coming soon)

3. Financial crises (think Lehman Brothers). Read my post on introduction of expected credit losses model (coming soon), and how could IFRS 9 have prevented Lehman crash.

4. As IFRS have become a global set of principles, this has resulted in disagreements within different regulators. Now, new standards have to be locally adopted before they can be introduced in certain jurisdictions. Heard of IFRS as endorsed by European Union?

How can you master IFRS within a short period of time? How can you be constantly up-to-date with latest standards, FAQs and issues, without getting bored with pages and pages of text?

Well, I for one, have spent over 10 years in the field and recently resigned from a managerial position at the Big 4 in their capital markets and accounting advisory department. I’ve spent 3 years to become a chartered accountant (ACCA), attended endless trainings and e-learnings and spent most of my work days reading through texts of over 1,000 pages trying to solve clients’ accounting issues. At PwC, I became IFRS 9 champion and that ‘financial instruments guy’.

Not all of us have this luxury called ‘time’ or are willing to swim in textbooks for years to master IFRS. I left my job to become independent IFRS consultant and little did I know that outside Big 4 or even my accounting advisory department, everyone hated complexities and technicalities of IFRS.

I stared my journey of searching for ‘easy to read’ IFRS material and like you, have found nothing of that sort. So, here we go – in my spare time from my office, clients and family, I will be translating IFRS into everyday English, and hope this initiative will ease lives of thousands of accountants and auditors a tad easier.

Till then,

JU

The post Intro appeared first on Finspect Advisory.