MASTER IN ACCOUNTING AND MANAGEMENT CONTROL

Course:
International Financial Reporting
&
Analysis

Proposed solutiond to study cases

Chapter 1

Ana Isabel Lopes

Department of Accounting

2023-2024
 STUDY CASE 1
Financial statements

https://r.lvmh-static.com/uploads/2023/03/deu-2022-va_vdef.pdf

International Financial Reporting & Analysis - Ana Isabel Lopes 2

1) What are the accounting standards used by LVMC in the consolidated financial statements?

Proposed answer:

Note 1.1.

1.1 General framework and environment

The consolidated financial statements for fiscal year 2022 were established in accordance with
the international accounting standards and interpretations (IAS/IFRS) adopted by the European
Union and applicable on December 31, 2022. (…) The consolidated financial statements for
fiscal year 2022 were approved by the Board of Directors on January 26, 2023.

International Financial Reporting & Analysis - Ana Isabel Lopes 3

2) Identify the complete set of consolidated financial statements presented

Proposed answer:

✓ Consolidated Income Statement

✓ Consolidated Statement of Comprehensive gains and losses
✓ Consolidated Balance sheet
✓ Consolidated Statements of changes in equity
✓ Consolidated cash flow statement
✓ Notes to the consolidated financial statements

Comments?

International Financial Reporting & Analysis - Ana Isabel Lopes 4

3) What is the most important current and non-current asset?

Proposed answer:

✓ Most important non-current asset, in percentage of total assets: Brands and other intangible assets (balance
sheet), particularly brands (note 3)

✓ Most important current asset, in percentage of total assets: Inventories and work in progress (balance sheet),
particularly finished products and wines (note 11)

International Financial Reporting & Analysis - Ana Isabel Lopes 5

4) What is the income at the end of 2022?

Proposed answer:

✓ Total net profit obtained by the group: 14,751 EUR Millions

✓ Total income attributable only to shareholders of the group: 14,084 EUR Millions

International Financial Reporting & Analysis - Ana Isabel Lopes 6

 5)Is the amount of income of 2022 different from cash and cash equivalents at the end of 2022? And is
the amount cash and cash equivalents at the end of 2022 equal in cash flow statements and statement
of financial position? Comment?

Proposed answer:

✓ Income is 2022 is different from cash and cash equivalents at the end of 2022. This situation is usual.

o Income: accrual basis → income/revenues (gains) and expenses (losses)

o Cash: cash basis → receipts and payments

✓ cash and cash equivalents at the end of 2022 by the statement of financial position is: 7,300 EUR Millions
✓ cash and cash equivalents at the end of 2022 by the statement cash flows is: 7,100 EUR Millions
o Reason for the difference (when exist): bank overdrafts

International Financial Reporting & Analysis - Ana Isabel Lopes 7

6) Identify the relationship between all the financial statements.

Proposed answer:

White board

International Financial Reporting & Analysis - Ana Isabel Lopes 8

 STUDY CASE 2
INTERIM FINANCIAL STATEMENTS OF LHVM
(IAS 34)

International Financial Reporting & Analysis - Ana Isabel Lopes 9

Conclusions of João Silva:
- LHVM prepares the interim consolidated
Proposed solution: comment
financial statements in accordance with
- Go to: https://www.lvmh.com/investors/investors-and-
IFRS;
analysts/publications/?publications=29&pub_year=2022
- LHVM prepares financial statements for 6
months and for a full year; - Download: https://r.lvmh-
static.com/uploads/2022/07/lvmh_interim-financial-report-
- LHVM complies with IAS 34, in the sense 2022.pdf
that they present the information in a -
condensed format, and the dates of the - Yes, interim consolidated financial statements are prepared
in accordance with IAS 34;
comparatives at the end of the first
semester are correct. - Yes, LHVM prepares financial statements for 6 months and
for a full year;

- Yes, they use IAS 34, but the comparatives present more
information that the necessary.

International Financial Reporting & Analysis - Ana Isabel Lopes 10

 STUDY CASE 3
ACCOUNTING POLICIES, CHANGES IN ESTIMATES
AND ERRORS (IAS 8)

International Financial Reporting & Analysis - Ana Isabel Lopes 11

Proposed solution: comment

1) C

2) D

3) D

4) C

5) A
Thank you.