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IFRS Group 1 Final


Dorothea Tompary

on 11 May 2010

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Transcript of IFRS Group 1 Final

Lindt Kris Soriano-Whitten
Dottie Tompary
Beth Farley
Ariel Roca
Anthony Ventrini * Founded in 1894 by Milton S. Hershey
* Headquartered in Hershey Pennsylvania
* Approximately 13,000 employees worldwide
* Major Subsidiaries: Canada, Mexico, Netherlands, Hawaii, India, and Brazil * Founded in 1845 by David Sprungli and his son Rudolf
* Headquartered in Kilchberg, Switzerland
* Approximately 7,400 employees
* Major Subsidiaries:France, Italy, Austria, Canada, Spain and USA Hershey's Lindt * Hershey Company
o Required for SEC registrants
o Must be written and signed by company management
o Acknowledges responsibility of management
o Protection for auditor

* Lindt & Sprungli
o IFRS does not require a report from management
o Includes Board of Directors' responsibility in audit report Differences in Managers' Report Differences in Audit Report Differences in Balance Sheet Lindt
- Shows Non Current Assets before Current
- Shows Shareholders Equity before Liabilities
- Non Current Liabilities, then Current Liabilities

The disclosure note number are next the item on the balance sheet for easy look up. Differences in the Income Statement Hershey's
Net sales - COGS - other expenses= Net income
Shows EPS basic and diluted Lindt
more indepth
Sales + other income - Expenses (lists all including depreciationand personnel expenses, and notes provided) Then includes operating profit which includes interst revenue and interest expense
The taxes netted from current and deferred * Hershey Company
o SEC requirement to report on internal control
o Must provide opinion on effectiveness
o Audit procedures based on standards provided by GAAS

* Lindt & Sprungli
o Opinion on internal control is not provided
o Audit procedures based on auditor's judgment Hershsey's
CA + LTCA = Total Assets
CL + LTCL + SHE = total liabilties and equity

Shows a more indepth Equity Differences in The Statement of Cash Flows •Hershey under the SEC must show a two year presentation for the balance sheet and three-years for all others. Not required by GAAP
•Lindt under IFRS must have comparative data for all amounts reported in its statements.
•Both had similar layout however Lindt had a notes column which allowed for easier access to the info that explained many of their numbers. Differences in The Statement of Changes in Equity •Hershey uses the only method of presenting comprehensive income that IFRS does not allow.
•Lindt has separate statement of comprehensive income and the totals are listed in the Changes in Equity.
•Lindt has a currency translation column. Both companies have foreign subsidiaries, but Hershey adds currency translation as a component of comprehensive income in the notes to the financial statements. Which stock to buy? Profit Margin Ratio

Hershey’s: 8.2% Lindt: 7.6%

:can be deceiving because one year can differ from the other tremendously, so we need to look at a couple more ratios to be sure this is a wise stock purchase.
Account Receivable Turnover Ratio:

Hershey’s: 12.243570 Lindt: 3.697986

:A higher number means that the company collects more frequently (good liquidity), whereas a low ratio may mean that clients are not paying up in a timely manner. Price to earnings ratio:

Hershey’s: 30.1 Lindt: 32.93 Return on Equity Ratio:

Hershey’s: 84% Lindt: 12.5% Payout Ratio
Hershey’s: 45.5% Lindt: 42.7% In our analysis of these ratio’s Hershey’s seems to be the company in which to buy stock based on the ratios. So who to lend to? Current Ratio
Hershey’s: 1.5 Lindt: 2.4
Cash Debt Coverage ratio
Hershey’s : 34.4% Lindt: 52.5%
We would lend to Lindt
- Revenue Recognition
- Critical Estimates
- Inventory- LIFO
- Software and R&D

- Revenue Recognition - Leasing
- Inventory- FIFO
- Software and R&D - Both companies include breakdowns of all balance sheet and income statement items
- Hershey includes much language on each items
- Lindt’s notes mostly consist of sheet composition Accounting Policies Footnotes WWFD? Debt to Asset Ratio
Hershey’s: 79.3% Lindt: 34.7%
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