Question

What are the key accounting policies for Hugo Boss?

Answer 1

Some of the key accounting policies of the Hugo Boss are as follows :-

1. For fixed assets :-

Intangible assets = depreciation is as per straight line method

Tangible assets = cost less depreciation

All financial assets are to be measured at cost

2. Current assets :-

Raw materials, consumables and supplied are measured at the moving average cost of acquisition.

Cash and cash equivalents are measured at the lower of nominal and market value.

3. Equity :-

All stocks are at face value

4. Provisions and liabilities :-

pensions were discounted using the average market interest rate over the past ten years and an assumed residual maturity of 15 years.

Liabilities are carried at settlement amount.

Revenue recognition :-

Sales are recognized when the significant risks and rewards of ownership of the goods have passed to the buyer. This is generally the case when the goods are delivered. Sales are disclosed net of sales deductions such as discounts, price reductions, customer bonuses and rebates.

Function cost :-

Function costs are broken down into cost of sales, selling expenses and general administrative expenses. Operating expenses are essentially allocated to the respective functions based on the allocation of cost centers to functions. Expenses incurred in connection with cross-functional activities or projects are spread among the functions concerned using an adequate allocation key.

Currency translation :-

Foreign currency receivables and liabilities are translated using the exchange rate on the transaction date and are measured at the mean spot rate on the balance sheet date. Exchange rate losses from assets and liabilities denominated in foreign currency incurred as of the reporting date are recorded. Exchange rate gains from the measurement of current assets and liabilities due in less than one year are recognized in profit or loss. Exchange rate gains are recognized in the line item other operating income and expenses from currency translation in the line item other operating expenses. Fixed assets purchased and inventories purchased in a foreign currency are translated at the mean spot rate on the transaction date.

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