International Accounting U22999: Burberry Plc Harmonization Analysis

This assignment provides an analysis of the harmonization of accounting policies, using Burberry Plc as a case study. It begins with an introduction to the concept of accounting harmonization, emphasizing its goal of removing differences in accounting policies across countries and promoting transparency. The assignment explores the reasons for harmonization, including the need for comparability, facilitating multinational company operations, reducing financial reporting costs, and accessing foreign capital markets. It then identifies key issues in harmonization, such as socio-political-economic differences and nationalism. The assignment focuses on Burberry Plc, a UK-based company, and examines its adherence to UK GAAP and IFRS. It highlights the company's approach to selecting accounting policies, making judgments, and applying the going concern approach. The conclusion stresses the importance of removing accounting gaps, improving accounting infrastructure, and adopting common accounting standards to successfully harmonize accounting policies and improve financial reporting. The assignment aims to provide students with a comprehensive understanding of the complexities and benefits of international accounting harmonization.

INTERNATIONAL
ACCOUNTING

FIRST UP
CONSULTANTS 2
HARMONIZATION
OF ACCOUNTING
POLICIES
Chosen Company: Burberry
Plc.
Chosen Country: United
Kingdom

FIRST UP
CONSULTANTS 3
INTRODUCTION
• The process of Harmonization of Accounts refers to the process of removing unwanted and
unnecessary differences in the accounting policy of the countries that are followed by them
in the course of financial reporting.
• Harmonization of accounting policies would allow different countries to have different
standards as long as the accounting policies of the company does not conflict with each
other.
• Harmonization of the accounting policies of the company between the UK GAAP and the
IFRS has been continuing and there are various actions and recommendations that the
accounting bodies intends to undertake.
• Quality level of the accounting policies that is followed widely is also of great importance
as the investors and financial information users widely depend on the quality of accounting
policy that is issued and undertaken by the companies for the purpose of preparing the
financial statements.

FIRST UP
CONSULTANTS 4
REASONS FOR HARMONIZATION
• The key reason for the harmonization of the accounting policies is to
bring uniformity and transparency in the accounting policies.
• Making the key features available to investors that is the
comparability feature of the financial statements.
• It would be easy for the Multinational Company for various
conglomerate actions they undertake that would be including the
various mergers and acquisitions.
• The costs associated with the financial reporting would also be
reduced.
• Access to foreign capital market is one of the key reason that requires
that harmonization of the accounting policies to take place.
• Quality level of the accounting policies that is followed widely is also
of great importance as the investors and financial information users
widely depend on the quality of accounting policy

FIRST UP
CONSULTANTS 5
ISSUES IN HARMONIZATION
• The key issues in the harmonization of accounting policies could be
well found out with the help of the challenges faced by the accounting
board on a widely basis.
• There are a number of differences that the accounting board usually
observes when considering the differences among various countries in
terms of socio-political-economic systems.
• Nationalism on the one hand also stands out to be one of the major
concern that the accounting body can face.
• Harmonization of the Accounting Policies is not Universally Accepted
because of various geo-political tensions, cultural and as well as social
factors that does not allow the accounting board to move ahead with
the harmonization and uniformity in the accounting policies.
• It is not always possible to force or impose a uniform accounting
policy on all organizations and entities

FIRST UP
CONSULTANTS 6
BURBERRY PLC.
The undertaken Burberry Group Plc. would be undertaken for the
purpose of analysis is from the United Kingdom that follows the UK
GAAP and the key actions taken by company are as follows:
• Selecting the appropriate set of accounting policies that the company
intends to follow and apply the same in the due course of financial
reporting
• There should be reasonable and prudent justification for the various
judgments and accounting estimates done.
• Application of Going Concern Approach.
• The financial statement of the company has been prepared in
accordance with the UK GAAP, that comprise of the FRS 101
‘Reduced Disclosure Framework’ that represents a true and fair view
in accordance to the directors of the company. On the other hand, the
group financial statement of the company have been prepared with the
global accounting standard that is IFRS.

FIRST UP
CONSULTANTS 7
CONCLUSION AND RECOMMENDATIONS
• Harmonization in the accounting standard is of prime concern and the
same has been undertaken into analysis with the help of the key issues
and reasons in the context of harmonization of accounting policies.
• It is necessary to remove the cultural, socio-economic and other
accounting gaps thereby promoting the harmony of accounting policy
in financial reporting.
• The benefits of harmonization of accounting policy would obviously
be enjoyed by companies as well in terms of well defining and
classification of the various transactions that are undertaken by the
company.
• Improving the accounting infrastructure and a spirit to have a common
accounting standard policy is required in order to successfully
harmonize the accounting policy of the companies.

THANK YOU
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