As a review of the ISO 55000 suite of asset management standards gets underway, IPWEA members are encouraged to have their say and inform the discussion, which has far-reaching implications for global asset and financial management.
Following its publication in early 2014, the first review of ISO 55000 suite of standards began in November 2015, when the ISO Technical Committee (TC) 251 met in Yokohama, Japan.
IPWEA Australasia’s Chairman of the National Asset Management Strategy, Australia (NAMS) Peter Way PSM attended the inaugural ISO TC meeting, representing IPWEA as part of the Standards Australia delegation.
The TC agreed there was a need to commence an immediate revision of ISO 55002 – the guidance part of the standards set – and that ISO 55000 and ISO 55001 should commence the review process which will take around two years, starting in January 2016.
Recognising the need to highlight the vital link between asset management and financial management, the TC established a number of working groups of which one will examine issues relating to finance.
This is an issue IPWEA has promoted strongly through the Standards Australia Mirror Committee and its development of the Australian Infrastructure Financial Management Manual (AIFMM), the 2015 edition of which was significantly rewritten to incorporate ISO 55000 Standards.
Way was appointed Convenor of the ISO TC 251 Finance Work Group, which has embarked on its first task of exploring the boundaries, similarities and differences between accounting standards and ISO 55000, by identifying and establishing terms and roles in order to seek to harmonize the workings of asset and financial management.
The next ISO TC meeting will be held in Sweden in June.
“The aim is to have some clear paths forward by the meeting in June,” Way says. “Then it’s a matter of working out how that translates into actions, be it further amendments ultimately to the standards themselves, which could well happen over the next few years, through to a revision that’s currently underway, which is in relation to ISO 55002.”
Way says the TC recognised that unless the people responsible for holding an organisation’s purse strings were attuned to the asset management principles and committed to achieving the objectives arising from the asset management process, there would likely be a problem in getting the necessary financial resources required to implement the asset management actions.
The TC identified a number of focus points, including;
- The desirability of better documenting stakeholder needs and associated reporting of financial implications;
- The need for common understanding of terminology and desirably a common taxonomy (which is all about getting asset management and financial management professionals speaking the same language and fostering mutual understanding);
- The desirability of common asset registers serving both asset management and financial management with data and information linked, consistent and traceable (promoting a single point of truth).
Way says there are a number of possible options through which the enhancements that are developed by the Finance WG could be incorporated into the ISO 5500X process, none of which should be seen as being mutually exclusive. These include:
- The most significant would be additional requirements in ISO 55001 (This however will not be a quick solution as such will no doubt need to happen as part of the review process over coming years);
- Next would be further guidance by way of explanatory information in ISO 55002. This must of course relate only to existing requirements in 55001. This may however be achieved more quickly as part of the current ISO 55002 revision;
- The possible application of separate guidance under the umbrella of ISO as some form of a companion documentation to the ISO 5500X Standards. This could take the form of being a ‘good practice guide’ and would give the opportunity to develop something more quickly through TC 251. It could be a good mechanism for testing the appetite for future enhancement of the requirements clauses in ISO 55001; and
- Identifying other relevant documentation and resources that provide guidance along the lines as seen by the WG as being consistent with its aims and that help advance the interests collectively seen by the WG as being relevant to the ISO 5500X objectives.
With each country following differing financial rules, Way says creating any overarching financial guide and/or standards will be challenging.
“That is the big challenge – for any international standard, it’s really what they’ve got to grapple with,” he explains. “What we’ll try and do through the work group is focus on the International Financial Reporting Standards (IFRS) and work on that in terms of what we do as a work group to try and promote the principles and the broad concepts, and then it’s a matter of how you translate those into the various country requirements.
“A lot of countries subscribe to the IFRS approach, but then tend to subtly modify it in the way they actually adopt it through their Accounting Standards Boards.”
Worldwide adoption of ISO 55000 so far
The first meeting of the TC shed some light on how countries around the world are adopting and applying the new ISO 55000 asset management standards. The following feedback was provided by delegates:
- Traditional infrastructure organisations (e.g. highways, railways, utilities, water companies, gas and power distribution networks) have been showing a great deal of interest in the use of the standards, while others (e.g. airports, ports, hospitals) are also showing interest in using them;
- In some countries, government bodies (e.g. treasury departments), regulators, municipalities are looking into requiring their use;
- Some new sectors (e.g. pharmaceuticals, internet companies, food producers) are making tentative steps towards using them; and
- There are areas where the National Standards Bodies felt the standards were good, and areas where they felt they could be improved.
Have your say
“This review is an exciting opportunity to identify and put in train possible enhancements to the ISO 5500X Standards that will benefit all stakeholders both in the asset management and financial management professions,” Way continues. “We need to grasp that opportunity and work collaboratively with all the stakeholders to achieve mutual benefits.
“I look forward to any feedback on the issues raised in the foregoing. In particular, any initial thoughts on the main topics that the WG needs to be addressing, would be of interest. Please feel free to contact me either by phone or email if you would like to have input on these issues of better aligning the asset and financial management activities within organisations.”
To get in touch with ISO TC 251 Finance Work Group Convenor Peter Way, email peter.way@ipwea.org.
Images:
1. Delegates to the Technical Committee Meeting of ISO 55000 in Yokohama
2. Peter Way, NAMS.AU Chair and ISO TC 251 Finance WG Convenor