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Mulberry's Accounting Policy Analysis

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Accounting Policy Compare and Contrast
Although Marks and Spencer and Mulberry are all fashion industries under retail channels that follow the rules of IFRS for auditing. In order to identify their similarities and differences in their accounting policies, the following six categories are compared and contrasted:
Lease
In terms of the financial lease, both Mulberry and M&S stated in their first paragraph the definitions of financial lease as “transfer substantially all the risks and rewards of ownership to the lessee” , but M&S disclosed more details of over how the financial lease are depreciated which are “charged to the income statement on the same basis as owned assets, unless the term of the lease is shorter…” and treated “as consisting …show more content…

They both have clear classification on different kinds of asset; for example, assets under construction are differentiated as the normal intangible asset, calculating at “cost less any recognized impairment loss”. It also comprise of detailed definition on which part of the asset are considered as Intangibles and how it is amortized and recorded, i.e. they both mentioned that software that is “not an integral part of a related item of computer hardware is treated as intangible asset” . However, M&S takes more focus on where to locate the specific items, for example, the acquire brand values can be found on the Statement of Financial Position at cost. Also M&S reveal more detailed on what costs are …show more content…

Intangibles with definite life are still tested annually for the impairment loss and are amortized on a straight-line basis.
Both companies articulate the method of assessing value in use which is used in deciding the recoverable amount—selecting the higher among the fair value less costs to sell and value in use. However, M&S is more careful and academic in this part, it mentions a concept of 3 years threshold as the long-term growth rate and the risk adjusted pre-tax discount rate to determine the value in use under IAS 36 . It has also indicates through a Sensitivity Analysis to ascertain that carrying amount will exceed the value in use. All of these facts and analysis are not shown in details in the Mulberry annual report.

Only Mulberry presents explicitly that the conditions and methods of recording impairment loss as an expanse immediately when recoverable amount is less than its carrying amount and when situation reverses, the loss will be recognized as income immediately unless the impairment loss is treated as a revaluation. The above computing methods are not mentioned in the M&S annual reports on impairment of intangible

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