Besserbrau AG-1

 

Besserbrau AG Besserbrau Besserbra u AG is a German beer beer producer headquartered headquartered in Ergersheim, Ergersheim, Bavaria. Bavaria. The company was was founded in 1842 by brothers Hans and Franz Besser and is publicly traded with shares listed on the Frankfurt Frankfu rt Stock Exchange. Exchange. Brewing in strict accordance accordance with the almost almost 500-year500-year-old old German Beer Purity Law, Besserbrau uses only four ingredients in making its products: malt, hops, yeast, and water. While the malt, yeast, and water are obtained locally, Besserbrau imports hops from a company located in the Czech Republic. Czech hops are considered to be among the world’s finest. Historically, Besserbrau’s Historically, Besserbrau’s products products were marketed marketed exclusively exclusively in Germany. Germany. To take advantage advantage of a potentially potentia lly enormous market for its products products and expand sales, Besserbrau began making sales in the People’s Republic Republic of China three years ago. ago. The company company established established a wholly-owned wholly-owned subsidiary subsidiary in China (BB Pijio) to handle the distribution distribution of Besserbrau Besserbrau products products in that country. country. In the most recent year, sales to BB Pijio accounted for 20% of Besserbrau’s sales and BB Pijio’s sales to customer in China accounted account ed for 10% of the Besserbrau Group’s Group’s total profits. profits. In fact, sales of Besserbrau Besserbrau products products in China have expended so rapidly and the potential for continued sales growth is so great that the compan com pany y recently recently broke ground ground for the constr construct uction ion of a brewery brewery in Shangh Shanghai, ai, China. China. To finance finance construction of the new brewery, Besserbrau negotiated a listing of its shares on the London Stock Exchange to facilitate an initial public offering of new shares of stock. Required: Discuss the various international accounting issues confronted by Besserbrau AG.  Answer  Answe r :

Some issues about international accounting that confronted by Besserbrau AG, those are: 1. Sales Sales to to Foreig Foreign n Custo Custome mer. r. As we have known, Besserbrau do export its products to China, it means Besserbrau does not sell their products only at their country in German anymore, but Besserbrau expand their sales to foreign customer. The problem that arise from sales to foreign customer is the different currency that is used us edsaction by Besse Bes serbr rbrau auwith (E (Euro uro) ) erent and and t BB Pij io .inItChina Ch inat (Y (Yuan uan). ). eBesse Bes serbr rbrau can not no acbe count nt sales sal es tran transac tion directly directl y differen diff currency currPijio ency. must mus translat tran slate China’s Chin a’saucurrenc curr ency y ttoaccou Germany Germ any currency. It will be happened, if between the two countries have no rules to use one currency. 2. Hedges Hedges of of Foreig Foreign n Exchan Exchange ge Risk Risk We assume that BB Pijio does not want to pay the products by same currency with Germany. Besserb Bess erbrau rau became exposed exposed to foreign foreign exchange exchange risk – the risk that the foreign foreign currency currency will decrease in Euro value over the life of the receivable. The obvious way to avoid this risk is to require foreign customers to pay for their purchases in Euro. Another way to avoid it is by hedging of foreign exchange risk. Hedge of foreign exchange risk can do with two ways, those are foreign currency  option,, options are a type of derivative financial instrument, the accounting for which can be quite option complicated and foreign currency forward contracts, contracts, it is commonly used to hedge foreign exchange risk. 3. Forei Foreign gn Direct Direct Inv Invest estme ment nt In this case, Basserbrau look their sales growth rapidly in China, so Besserbrau wants to establish new facility in there. In international international accounting accounting we know it as foreign direct investment, investment, especially especially Greenfield investment. investment. It means Besserbrau invests in China by establishing new manufacture or branch. And there are primary issues if Besserbrau do foreign direct investment, first it must convert standard accounting in foreign country into local standard accounting and translate foreign currency (Yuan) into local currency (Euro). 4. Financi Financial al Reportin Reporting g for Foreign Foreign Opera Operation tions s 5. Interna Internation tional al income income taxatio taxation n in order by making import and export from each country, China, Germany, and Czech also put a tax on it. Their sales also have a taxes on it. To reduce and to avoid the double taxes, the countries should make a rule about it. The tax rate in china has a high tariff rather than in germany. It will make the revenues from china lower than germany if the germany also put the tax on the sales in china. 6. Perform Performanc ance e Evaluatio Evaluation n of Foreign Foreign Operati Operations ons By measuring the return on investment of each country, there will be arise a different result. If the ROI of each country measure by using Euro, BB Pijio ROI percentage will be smaller than Basserbrau ROI because the fluctuative Yuan on Euro.

 

7. Cross-l Cross-listi isting ng on Forei Foreign gn Stock Stock Excha Exchange nge Besserbrau listed their stock ot only in Frankfurt Stock Exchange, but also in London Stock Exchange in addition to build their facilities in China. There would be advantages to having the stock listed and traded on several foreign stock exchanges. Brasserbrau must convert their annual report into london accounting standard. Brasserbrau doesn;t have to convert it because both of the country adopt IFRS in their accountign standard rules. Brasserbrau must transalate their currencies from Euro into Pundsterling currency because LSE use Poundsterling in showing the financial statement. 8. In Inter terna natio tiona nall Trade Trade International trade consist of export or import. In this case, Besserbrau has imported hops from Czech Republic, Germany neighbour. Then, Besserbrau import their ingredients and exports their beer to China as its target market. 9. International International Harmonization Harmonization of Account Accounting ing Standard BB Pijio doesnt have to translate their currency into Euro in making the consolidated financial statement. It because Peoples Republic China and Germany has ad opt the IFRS in each accounting standard of their country. Beberapa masalah tentang akuntansi internasional yang dihadapkan oleh Besserbrau AG, yaitu: 1.

Penjualan ke Pelanggan Luar Negeri.

Seperti kita tahu, Besserbrau melakukan ekspor produknya ke China, itu berarti Besserbrau tidak menjual produk mereka hanya di negara mereka dalam lagi Jerman, tetapi Besserbrau memperluas penjualan kepada pelanggan asing. Masalah yang timbul dari penjualan ke pelanggan asing adalah mata ma ta uang uang yang yang berbe berbeda da yang yang digun digunaka akan n oleh oleh Besse Besserbr rbrau au (E (Euro uro)) dan BB Pijio Pijio di Cina Cina (Y (Yuan uan). ). Besserbrau tidak dapat menjelaskan transaksi penjualan secara langsung dengan mata uang yang berbeda. Ini harus mata menggunakan uang China menjadi mata uang Jerman. Ini akan terjadi, jika kedua negara tidak menerjemahkan memiliki aturan untuk satu mata uang. 2. Lindung nilai Risiko Valuta Asing Kami berasumsi bahwa BB Pijio tidak ingin membayar produk dengan mata uang yang sama dengan  Jerman. Besserbrau Besserbrau menjadi terkena risiko mata uang asing - resiko bahwa mata uang asing akan menurunkan nilai Euro sepanjang umur piutang. Cara yang jelas untuk menghindari risiko ini adalah untuk meminta pelanggan asing untuk membayar pembelian mereka dalam Euro. Cara lain untuk menghindarinya adalah dengan lindung nilai terhadap risiko nilai tukar. Lindung nilai atas risiko nilai tukar dapat dilakukan dengan dua cara, yaitu opsi mata uang asing, pilihannya adalah jenis instrumen keuangan derivatif, akuntansi untuk yang bisa sangat rumit dan kontrak berjangka mata uang asing, itu biasanya digunakan untuk lindung nilai risiko nilai tukar. 3. Investasi Asing Langsung Dalam hal ini, Basserbrau melihat pertumbuhan penjualan mereka cepat di China, sehingga Besserbrau ingin mendirikan fasilitas baru di sana. Dalam akuntansi internasional yang kita kenal sebagai investasi asing asi ng langs langsun ung, g, terut terutam ama a Green Greenfie field ld inves investas tasi. i. Artin Artinya ya Bess Besserb erbrau rau berin berinve vest stas asii di Cina Cina dengan dengan mendirikan pabrik baru atau cabang. Dan ada isu-isu utama jika Besserbrau melakukan investasi langs lan gsun ung g asing asing,, pertam pertama a harus harus meng mengub ubah ah stand standar ar akunt akuntans ansii di negar negara a asing asing ke dalam dalam stand standar ar akunt aku ntan ansi si lokal lokal dan mene menerje rjema mahk hkan an mata mata uang uang asing asing (Y (Yuan uan)) ke dalam dalam mata mata uang uang lo lokal kal (E (Euro uro). ). 4.

Pelaporan Keuangan Operasi Luar Negeri

5. Internasional pendapatan perpajakan agar ag ar deng dengan an memb membua uatt impo imporr dan dan eksp ekspor or dari dari seti setiap ap nega negara ra,, Chin China, a, Jerm Jerman an,, dan dan Ceko Ceko juga juga menempatkan pajak di atasnya. Penjualan mereka juga memiliki pajak di atasnya. Untuk mengurangi dan menghindari pajak ganda, negara-negara harus membuat aturan tentang hal itu. Tarif pajak di cina memiliki tarif tinggi daripada di Jerman. Ini akan membuat pendapatan dari cina lebih rendah dari  jerman jika Jerman Jerman juga juga menempatk menempatkan an pajak pajak pada pada penjualan penjualan di cina. 6. Evaluasi Kinerja Operasi Luar Negeri Dengan mengukur laba atas investasi dari setiap negara, ada akan muncul hasil yang berbeda. Jika ROI setiap set iap ukura ukuran n negara negara denga dengan n meng menggu guna nakan kan Euro, Euro, BB Pijio Pijio persen persentas tase e ROI ROI akan akan lebih lebih kecil kecil dari dari Basserbrau ROI karena Yuan fluktuatif pada Euro. 7.

Cross-listing di Bursa Efek Luar Negeri

 

Besserbrau terdaftar saham mereka ot hanya di Frankfurt Stock Exchange, tetapi juga di London Stock Exchange di samping membangun fasilitas mereka di Cina. Akan ada keuntungan untuk memiliki saham tercatat dan diperdagangkan di beberapa bursa efek asing. Brasserbrau harus mengkonversi laporan tahunan mereka ke dalam standar akuntansi london. Brasserbrau doesn; t harus mengubahnya karena kedua negara mengadopsi IFRS dalam aturan accountign mereka standar. Brasserbrau harus transalate mata uang mereka dari Euro ke mata uang Pundsterling karena penggunaan LSE Poundsterling dalam menunjukkan laporan keuangan. 8. Perdagangan Internasional Perdagangan internasional terdiri dari ekspor atau impor. Dalam hal ini, Besserbrau telah mengimpor hop dari Republik Ceko, Jerman tetangga. Kemudian, Besserbrau mengimpor bahan dan ekspor bir mereka ke Cina sebagai target pasarnya. 9. Internasional Harmonisasi Standar Akuntans BB Pijio tidak harus harus menerje menerjemah mahkan kan mereka ke dalam dalam mata mata uang uang Euro Euro dalam dalam membua membuatt laporan laporan keuangan konsolidasi. Ini karena Republik Rakyat Cina dan Jerman telah memilih iklan yang IFRS dalam setiap standar akuntansi negara mereka.