本文是会计专业的留学生Essay范例，题目是“Accounting for Corporate Accountability（企业责任会计）”,会计世界比以往任何时候都更加复杂。公允价值等计量基础在许多组织的财务报告中很常见，因为它经常被视为“纯粹的衡量”，并促进会计核算的一致性(Barth和Landsman, 2018)。另一些人认为公允价值具有误导性，在测量某些资产和负债时难以应用，还有其他更适用的方法。该报告应分析Superdry的财务状况报表，并评估用于得出公司资产价值的不同计量基础。
Superdry Plc 超级公司
The world of accounting is more complex than ever. Measurement bases such as fair value is common in many organisations financial reports as it is often considered to be seen as a 'pure measure' and promotes consistency within accounts (Barth and Landsman, 2018). Others believe that fair value is misleading and is difficult to apply whilst measuring certain assets and liabilities and there are alternative methods that are more applicable. This report shall analyse Superdry's statement of financial position and evaluate the different measurement bases used to derive the value of the firm's assets.
Fair value 公平价值
Much of the current accounting standards and Superdry's preparation of financial report has revolved around fair value and under the assumption that the concept of markets is in a perfectly competitive equilibrium. In these conditions, there is a unique market price which is based on a full information of assets and an attraction to this price as a measurement tool. This ideal measurement based on market price is the fair value (Barth and Landsman, 2018). Superdry has implemented fair value to measure variety of their organisational assets and liabilities.
许多现行的会计准则和Superdry的财务报告都是围绕公允价值，并在市场概念处于完全竞争均衡的假设下进行的。在这种情况下，有一个独特的市场价格，它是基于资产的充分信息，并吸引以这个价格作为衡量工具。这种基于市场价格的理想衡量方法是公允价值(Barth and Landsman, 2018)。Superdry已经实施了公允价值来衡量其组织的各种资产和负债。
The use of fair value to measure assets and liabilities is prevalent throughout the financial report of Superdry. Accounting policies implemented by Superdry has been prepared under the historical cost convention as modified by fair values (Superdry, 2019). These measurement basis act in accordance with International Financial Reporting Standard (IFRS) acquired for use in the European Union and commensurate with the Companies Act 2006 (Nobes, 2015).
Superdry has contrived fair value to measure the foreign exchange contract of the firm from 2018 to April 2019. Fair value re-measurement of the contract increased substantially from £20.8m in 2018 to £23.9m in 2019. The foreign exchange contract is allocated as an exceptional and other item as the unrealised gains and losses on these trades do not reflect the underlying trading performance of Superdry (Superdry, 2019). Further, other derivative financial instruments such as trade receivables and cash/ cash equivalents were recognised and re-measured at fair value at the end of each reporting period (Superdry, 2019). All the gains and losses made by the financial instruments (measured by fair value) were recognised in Superdry's income statement.
Superdry group has deployed the acquisition method of accounting for business entities that do not operate under common control (Superdry, 2019). The consideration transferred in order to acquire a subsidiary includes the fair value of an assets and liabilities due to the results from a possible consideration arrangement (Superdry, 2019). The cost of acquisition is considered as incurred expenses and any assets acquired in a business combination are measured initially at their fair values in relation to their acquisition date (Superdry, 2019).
However, the concept of fair value is set in a belief that markets are complete, but this is not always the case as markets are dynamic and may not operate in a perfectly competitive equilibrium (Ronen, 2008). According to Grossman and Stiglitz (1980), asymmetric information between parties is a key barrier to market perfection as prices cannot reflect the information available and information is costly. This means that the market price for an asset identified using fair value might be less reliable due to information asymmetry and dynamic market conditions. This is further elaborated by Beaver and Demski (1979), as they stated that if the market was complete and perfect, there will be no obligation for firms like Superdry to provide accounts information as everyone will be informed. This demonstrates that accounts should be considered as a provider of useful information rather than measurement information.
Other problems of using fair value are, it showcases lot of emphasis on selling price rather than the net realisable value which is selling price less cost to sell (Dean, 2010). This means that fair value fails to measure the items in terms of actual cash flow stemming from the assets. Further, use of exit prices rather than entry prices precludes the possibility of entry prices being more appropriate in certain circumstances (Lennard, 2010). For instance, replacement costs of assets used by Superdry, may better capture the cost of using assets such as machinery and leads to more useful measures of profit margins in a going concern business like Superdry (Lennard, 2010). Additionally, market prices regarded by fair value are non-entity specific meaning that fair value does not reflect the circumstances and economic opportunities facing Superdry (Penman, 2007). In a real business world, accounts should relate to reporting the state of a specific entity like Superdry, in order to fulfill the accountability function to users who are not fully informed. All these problems associated to fair value culminates to the reasons why many firms are less willing to use fair value measurement for wider range of their assets.
Valuation of Superdry's inventories 超级库存的价值
As of April 2019, Superdry held inventory worth of £190.8m and stock provision was £3.9m (LSE, 2019). The valuation of inventories involved of judgement in recording provisions for obsolete inventory. Superdry's accounting policy is established upon the ageing of inventory by season, with percentage provision applied which reflects the historical rate of losses made (Superdry, 2019). In order to test the adequacy of inventory provision, Superdry considered the historical accuracy of managements provisioning percentages for inventory (Superdry, 2019).
截至2019年4月，Superdry持有价值1.980亿英镑的库存，库存拨备为390万英镑(伦敦证交所，2019年)。存货的估价涉及对存货过期准备的记录的判断。Superdry的会计政策是根据季度存货的老化情况制定的，使用了反映历史损失率的百分比拨备(Superdry, 2019)。为了测试库存准备的充分性，Superdry考虑了库存管理准备百分比的历史准确性(Superdry, 2019)。
Using historical data/ historical cost accounting (past entry value) has its own merits and demerits. Unlike fair value which emphasises the behaviour of the market, historical cost accounting does not acknowledge market value of the financial assets. This makes it easier for Superdry to use historical cost accounting to predict future outcomes and provide valuation of the firm's inventories. Further, historical data are considered to be objective, reliable and allows Superdry to keep track of their inventories (Reis, 2007).
However, historical cost accounting does not contemplate the present/real value of assets in the current market (Reis, 2007). For instance, Superdry using provisioning percentages from the past to predict the future sales or losses of inventories may not always be correct and expected outcomes could differ from predicted rates. Further, historical cost accounting fails to consider economic factors such as inflation levels and changing prices (Whittington, 2010). During the inflation period, the price of assets such as inventories is distinct as there is substantial level of changes in price, it reflects vast difference between the original price and the current market price (Grossman and Stiglitz, 1980). This means that the methodology used by historical cost accounting fails to incorporate dynamic economic and market conditions and failure to acknowledge changes in price can lead to major discrepancies on a financial statement. This leads to me questioning the reliability and appropriateness of this method and is Superdry making a mistake by using historical cost accounting to provide valuation of their inventories?
Valuation of Superdry's Retail stores/assets 评估Superdry的零售商店/资产
Majority of Superdry's financial and non-financial assets such as retail store assets were subjected to impairment. In accounting, impairment refers to comparing the current book value of an asset to the cash flow projections or total profit expected to be generated by that specific asset (Hashim, Li and O'Hanlon, 2016). Superdry's retail owned assets are leasehold and value in use measurement base was considered in the impairment assessment. Value in use of the assets were calculated using expected future cash flows which incorporated discount rates, management assumptions and estimates of future performance (Superdry, 2019). In total, an impairment of £42.6m was discerned in April 2019, this was an increase of £37.3m from £5.3m in 2018 (Superdry, 2019).
Superdry的大部分金融资产和非金融资产，如零售商店的资产都受到了减值影响。在会计中，减值是指将某项资产的当前账面价值与该特定资产预计产生的现金流预测或总利润进行比较(Hashim, Li and O’hanlon, 2016)。Superdry的零售自有资产为租赁资产，在减值评估中考虑了使用价值计量基础。资产使用价值是根据预期未来现金流计算的，其中包括贴现率、管理假设和对未来业绩的估计(Superdry, 2019)。总的来说，2019年4月辨别出了4260万英镑的减值，这比2018年的530万英镑增加了3730万英镑(Superdry, 2019)。
To implement testing purposes, Superdry considered each store as CGU (cash generating unit) and each CGU was tested for impairment if any indicator was identified. As sales of Superdry has plummeted in recent years, all 248 stores were tested for impairment in 2019 (Superdry, 2019).
Value in use of each CGU was calculated based on Superdry's forecasted cash flows and latest budget, covering a four-year period (Superdry's medium term financial plan) which regards historic performance (Superdry, 2019). Cash flows were discounted using the weighted average cost of capital WACC, cash flows beyond the four-year period were extrapolated using long term growth rates that approximate to country specific rates (Superdry, 2019).
As mentioned above, the store impairment review involved management making several estimates to identify the Value in use of the stores which being the net present value of the forecasted cash flows (Superdry, 2019). With every management decision made, there is the possibility of association to 'agency theory', which refers to managers in Superdry acting in their own interest to maximise their own personal utility as opposed to making decisions on behalf of the organisation (Boučková, 2015). In this assessment, management determined each store to be a cash generating unit and as most decisions are made by management, these factors question the key audit matter related to the overall appropriateness of the estimates.
Property, plant and equipment物业、厂房及设备
Similar to inventories, Superdry's non-financial assets such as property, plants and equipment are stated at historical cost less accumulated depreciation and impairment (Superdry, 2019). Original purchase price and the costs involved to function the asset is equalled to the total cost (Superdry, 2019). Depreciation is provided at rates and is calculated by dividing the depreciable amount of the fixed asset (which is the difference between salvage value and cost) by its useful economic life span (Superdry, 2019). The process of calculating deprecation of Superdry's assets are shown below: (Source: Superdry, 2019)
与存货类似，Superdry的非金融资产，如物业、厂房和设备，均按历史成本减去累计折旧和减值(Superdry, 2019)列报。原始购买价格和运行资产所涉及的成本等于总成本(Superdry, 2019)。折旧是按比率提供的，计算方法是将固定资产的可折旧金额(即残值与成本之间的差值)除以其有效经济寿命(Superdry, 2019)。Superdry资产折旧计算过程如下:(来源:Superdry, 2019)
Freehold buildings = 50 years on a straight-line basis
Furnitures, fixture and fittings at = 5-10 years straight-line basis
Computer equipment's = 3-5 years straight line basis
Leasehold improvements = 5-10 years straight line basis
Similar to the impairment of retail stores, the carrying values of non-financial assets such as plant and equipment of Superdry was tested annually to determine whether if any impairment is required. The recoverable amount of Superdry's non-financial asset is higher than its value in use and fair value less costs to sell (Superdry, 2019). In this case, Superdry has made an impairment gain as the carrying amount of these assets does not exceed its recoverable amount.
Intangible assets were initially identified at a cost. After recognition, Superdry measured the intangible asset at cost less accumulated amortisation (Superdry, 2019). Superdry's intangible assets with no residual value and with finite life are amortised on a straight-line basis over their life span as: (Source: Superdry, 2019)
无形资产最初按成本计价。确认后，Superdry以成本减少累计摊销的方式计量无形资产(Superdry, 2019)。Superdry公司无剩余价值且使用寿命有限的无形资产按寿命直线摊销如下:(来源:Superdry, 2019)
Website and software = 5 years
Trademarks = 10 years
Lease premiums = over the life of the lease on straight-line basis
Distribution agreements = 6 –23 years
In rare cases, companies may choose to measure the asset at fair values if it can be resolved by reference to an active market (IFRS, 2019). One of Superdry's intangible assets, distribution agreements, comprise the fair value, at the date of acquisition of the agreements as part of a business combination (Superdry, 2019).
Alternative measurement base 选择测量基础
In modern accounting, few alternative measurement bases have been devised to approach problems corresponding with fair values and historical cost accounting. One of the methods formulated is deprival value and Superdry can potentially implement this method in their financial statements in the future. This method advocates informational approach rather than solely emphasising on pure measurement approach and has advantage over other methods as it identifies the most appropriate value measure in particular economic conditions (Macve, 2010). Further, DV is more appropriate to regulatory and managerial decisions (Weetman, 2007), whereas fair value fails the tests of reliability and relevance in accordance to measure business performance of Superdry (Penman, 2007). Fair value solely focuses on exit price at the measurement date may be considered hypothetical, as immediate disposal of assets may not be the best option and it ignores valuable transaction costs that could have been used in important decision making (Horton, Macve and Serafeim, 2019). These are the reasons why many ignore the concept of fair value and this has seen a surge in formulation of new methods such as deprival value. Using deprival value allows firms like Superdry to be more consistent with current conventions for income statement and revenue and profit measurement presentation (Whittington, 1998).
在现代会计中，很少有替代的计量基础被设计来处理与公允价值和历史成本会计相对应的问题。制定的方法之一是剥夺价值，Superdry可能会在未来的财务报表中实施这一方法。该方法提倡信息方法，而不是单纯强调纯计量方法，它比其他方法更有优势，因为它确定了在特定经济条件下最合适的价值计量方法(Macve, 2010)。此外，DV更适合于监管和管理决策(Weetman, 2007)，而公允价值未能通过可靠性和相关性测试，以衡量Superdry的业务绩效(Penman, 2007)。公允价值只关注计量日期的退出价格可能被认为是假设的，因为立即处置资产可能不是最好的选择，它忽略了本可以用于重要决策的宝贵交易成本(Horton, Macve和Serafeim, 2019)。这就是许多人忽视公允价值概念的原因，这也导致了诸如剥夺价值等新方法的涌现。使用剥夺价值使得像Superdry这样的公司在利润表和收入和利润计量报告方面更符合当前的惯例(Whittington, 1998)。
However, there are potential limitations of deprival value if Superdry was to implement this methodology. Deprival value uses three different measures one of them being 'value in use' which is considered to be highly subjective, and this can lead to aggregation problems (Weetman, 2007). Further, deprival value uses decision trees and over relies on simple pedagogical formulation, there can be serious consequences of using these processes if it is not interpreted correctly (Macve, 2010). Lastly, we all need to remember that markets are imperfect and information asymmetry exists meaning choice of measurement objective is bound to involve a degree of subjective judgement.
In conclusion, Superdry has used variety of measurement bases in their financial report such as historical cost accounting (past entry value), fair value (exit price) and the highly subjective 'value in use.' As mentioned above, Superdry's accounting policies is based upon the ageing of inventories, with percentage provision applied reflecting the historical rate of losses made (Superdry, 2019).
This method allows Superdry to identify the progress made in executing the plan and acknowledge the values added/earnings from transactional exit prices with value surrendered/costs in transactional input prices (Dean, 2010). However, historical cost accounting has major flaws in its armour as it fails to report the current value of assets held by Superdry and majority of the outcomes predicted by historical rates may not always be correct. This questions the reliability and appropriateness of historical cost accounting.
Similarly, fair value has assisted Superdry to measures the value of the firm's foreign exchange contract. But using fair value fails to address the issues of dynamic market conditions and asymmetric information between parties (Barth and Landsman, 2018). This means that the price reflected or measured by fair value could potentially be misleading and this could cause major problems for Superdry as financial and timing costs may increase in order to remeasure their valuation of their assets.
To overcome these challenges, I strongly urge Superdry and other firms to implement deprival value (DV) to provide valuation of their assets. DV provides a decision rule for choosing the relevant measurement basis for any given economic situation and it promotes information approach as opposed to pure measurement procedure (Whittington, 1998). DV is far superior for internal use by managers and is relevant to assist managers to make important decisions (Weetman, 2007). But it is always important for accounts users to understand that, all of these methods have limitations and in the world of imperfect markets and asymmetry information it is difficult to find the perfect solution to these issues.
为了克服这些挑战，我强烈敦促Superdry和其他公司实施剥夺价值(DV)，为其资产提供估值。DV为任何给定的经济状况提供了选择相关测量基础的决策规则，它促进了信息方法而不是单纯的测量程序(Whittington, 1998)。DV对于管理者的内部使用要优越得多，并且有助于管理者做出重要的决策(Weetman, 2007)。但重要的是，帐户用户要明白，所有这些方法都有局限性，在市场不完善和信息不对称的世界中，很难找到完美的解决方案，这些问题。
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