Accent Group Limited Case Study 2022

Running head: ACCENT GROUP LIMITED – CASE STUDY
ACCENT GROUP LIMITED – CASE STUDY
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ACCENT GROUP LIMITED – CASE STUDY1
Executive Summery
This report titled “Accent Group Limited – Case Study” is prepared with the objective of
analysing the applicability and compliance of the selected Australian Stock Exchange listed
company named Accent Group Limited. Accent Group Limited is an Australia based
footwear company which is the market leader in Australia in retail and distribution of
performance and lifestyle footwear. The group have more than 420 retail store across
Australia as well as in New Zealand. The firm also have the 10 different retail banners as well
as the distribution right of the 10 international brands in the Australia and New Zealand. The
10 different brands of the group are Hyper DC, CAT, The Athlete’s Foot, Top – Sider,
Platypus Shoes, Merrell, Stance, Palladium, Skechers and Vans. All the brands of the group
come up with its own unique presence to the retail sector of both Australia and New Zealand.
The main objective of the report is to evaluate the compliance of Accent Group Limited in
the basis of the following accounting standards: -
 Accounting for leases
 Accounting for mineral resources
 Accounting for foreign currency transactions and forward exchange contracts
Further, in the process of analysis the company’s compliance the various other important
concepts and details are come into the focus, not only in the basis of the above stated
accounting standards but also the some other requirement that is required for any company to
become successful in their business operations. Those are as follows: -
 Disclosure and practices of the Accent Group in terms of sustainability and
environmental accounting
 Earnings management practices of the Accent Group
 Measurement practices of the Accent Group

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The report shows the methodology of data collection and analyse those data reach the
findings and then implement those findings and finally recommend the company as per the
findings.

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Table of Contents
1. Introduction........................................................................................................................4
2. Methodology......................................................................................................................5
3. Findings............................................................................................................................10
3.1 Accounting for Lease.....................................................................................................10
3.1.1 Compliance with AASB 16.....................................................................................11
3.1.2 Management Approaches and Theories of Accent Group Limited........................14
3.2 Accounting for Mineral Resources – AASB 6...............................................................17
3.3 Accounting for foreign currency transactions and forward exchange contracts – AASB
121........................................................................................................................................18
3.3.1 Compliance with AASB 121...................................................................................20
4. Implications of Findings..................................................................................................20
4.1 Implication of AASB 16 on Accent Group Limited......................................................20
4.2 Implication of AASB 6 on Accent Group Limited........................................................21
4.2 Implications of AASB 121 on Accent Group Limited...................................................21
5. Conclusion and Recommendations..................................................................................22
6. References........................................................................................................................24
Appendix..................................................................................................................................28

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1. Introduction
Accent Group Limited is an Australia based footwear company which is the market
leader in Australia in retail and distribution of performance and lifestyle footwear. The group
have more than 420 retail store across Australia as well as in New Zealand. The firm also
have the 10 different retail banners as well as the distribution right of the 10 international
brands in the Australia and New Zealand. The 10 different brands of the group are Hyper DC,
CAT, The Athlete’s Foot, Top – Sider, Platypus Shoes, Merrell, Stance, Palladium, Skechers
and Vans. All the brands of the group come up with its own unique presence to the retail
sector of both Australia and New Zealand. As the Accent Group is listed in the Australian
Stock Exchange hence it is subject to compliance with applicable the Australian accounting
standards to ensure that the financial statements of the firm are reliably and faithfully
represented. The Australian Security Investment Commission is also concerned with the
compliance and applicability of those accounting standards of the Australian Accounting
Standard Boards like Accounting for leases, Accounting for mineral resources and
Accounting for foreign currency transactions and forward exchange contracts. Hence, this
report perform the analysis of the Accent Group compliance and applicability of the firm is
respect to the above stated standards. Further, this report also analyse the disclosure and
practices in respect to sustainability and environmental accounting, earnings management
practices and measurement practices as these are also an important function of the company
and the firm need to perform this functions wisely to profitable in the international market.
To analyse the sustainability of the firm in respect to the above stated accounting standards of
Australia, this report evaluate the various aspect of the firm like accounting theories used by
the Accent Group in preparing their financial statement, annual report, internal control and
management of the firm, board of directors, auditors, political issues and various other aspect
which directly or indirectly affect the performance of the Accent Group.

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2. Methodology
The subject which examined throughout this report focuses on the compliance and
applicability status of the Australian based company Accent Group Ltd in reference of the
three accounting standard of Australia in the respect of the accounting theories, accounting
concept and regulation of accounting used and consider by the Accent Group in their
financial reporting. This report analyse the following Australian Accounting Standards: -
 Accounting for leases – AASB 16 and AASB 17
 Accounting for mineral resources – AASB 6
 Accounting for foreign currency transactions and forward exchange contracts –
AASB 121
Before analysing the compliance or the applicability of the Accent Group Limited in
respect of the above mentioned accounting standards, it is important to understand why this
accounting standards are important and why the accounting standards are required. To answer
this question there are various papers are available regarding the accounting standards
(Rankin 2017). According to Rankin, “accounting standards are important to ensure that
quality financial reports are produced by companies and that those reports will support users
to make well informed and valuable decisions”. In simple words, the accounting standards
are the set of rule, standards and procedure, which defines the basis of the accounting policies
and practices. This helps to establish the transparency in the financial reporting throughout
the entire world (Pwc 2016). Apart from that every country also have their own accounting
standards which establish the uniformity in the financial reporting among the entire company
of the country, like Australian Accounting Standard Board is for the Australian based
companies while General Accepting Accounting Principles is the accounting standard of
United States but these standards is followed by the every country of the world. The

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accounting standards relate to all the financial aspects of the firm like income, expenses,
share capital, loans, profit and like.
Hence, it is become important to analyse the every accounting standards and to know its
intention in relation to providing quality information in the financial reporting of the firm.
This report uses the secondary method of research and not the primary research methodology
because the entire data for the research is only available in the official website of the
company and it can be only collected through the company’s website (RCG Corporation Ltd
2019). While to analyse the data collected the research through the Chartered Accountant’s
Financial Reporting Handbook of 2017. This is also based in the various other articles related
to the accounting standards which are available in the internet. This gather those information,
this research uses the Google search and various other authentic websites to get the various
articles related to this topic. The main objective of this research of the articles is to obtain the
information about the Australian Accounting Standards and the changes took places in the
accounting standards of Australia.
After getting the good knowledge and understanding of the each accounting standards,
then it is possible to apply this knowledge to investigate compliance to the standards by the
Accent Group Limited. The primary research regarding the compliance and adaptation of the
accounting standards of the Accent Group Limited is performed by the collecting the related
data through the public channels such as company annual reports and filing available on the
ASX website along with the information provided on the company’s own website (Kieso,
Weygandt and Warfield 2019). The further more information are taken from the several other
studies are performed by the different researchers as well as the academic articles and
journals.

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While, researching the compliances of the Accent Group Ltd with the accounting
standards it was noticed that there is the certain relationship among the standards of
accounting as well as various other concepts of accounting including the practices along with
these relationships were further explored in respect of textbooks accounting, journal articles
as well as various accounting websites. The followings are the some important concepts and
practices those are related with the focused accounting standards: -
 Management Approaches
 Accounting Theories
 Financial Report Analysis
 Capital Investment
 Measurement Systems
While, the further research as well as the analysis of the concern topics was
undertaken which included the some primary calculations which are required by the concern
accounting standards are mentioned below: -
AASB 16 and AASB 17 - Accounting for Leases
The followings are some calculation of debt ratios in respect of the debt of the firm as
well as the lease standards effect on these. The followings are the some calculations of the
financial ratios which are influenced by the AASB 16 and AASB 17 Accounting for Leases
standards. The followings are the formula of the : -
Debt to Equity Ratio with Operation Leases Expensed: Total Liabilities
Total Equity
Debt to Equity Ratio with Operating Leases Expensed:
Total Liabilities+Operating Lease Expenses
Total Equity