IFRS is an acronym that stands for International Financial Reporting Standards. It is a set of standards of accounting that is slowly growing to encompass the whole world in the era of accounting supremacy by most firms in different economies. It seeks to analyze the public listed companies’ financial procedures and practices plus their statements. This paper will seek to analyze two firms from two different countries that either or not practice the IFRS policies. Most companies report their economic activity in the form of accounting standards. The Generally Accepted Accounting Principles (GAAP) and the International Financial Reporting Standards (IFRS) help the accountants, managers, information system designers, investors, and auditors in the processing, interpreting the economic state of the firm (Accountancy Age 2007).
The countries in question are the Australian country that adopts the policies of the IFRS and the Chinese economy that does not provide room for the application of the IFRS policies. China claims that these policies are meant to demean the developing economies financially and that they have in grounds to be practiced in their home country’s economy. Meanwhile the Australian economy boasts of development especially in the finance and banking sector where these policies are to be implemented accordingly. For purposes of this paper, I will discuss the firms in the grocery and the retailing sector and due to this I will handle Aldi chain of stores in Australia against the Tesco firm operating in the Chinese market (Accountancy Age 2006). Overview of the Firms
Aldi is an international retailing grocery store that opened its first retailing store in the year 1913. This was after Albrecht decided to open the store in Germany to offer grocery services to the inhabitants of the city of Munchen. The store derives its name from the initial first letters of the founder’s name plus the first two letters of the term Discount. The most recent store was in Australia where the operations of the Company have grown to very unimaginable heights. The store is ranked 12th among the top 30 food retailers in the global arena. In the year 2000, Australia named it the top retailing Company. This case study aims at exploring the successes in the enterprise, its stores’ operations, corporate functions, international expansions and the distribution centers.
Aldi is the Australian retailing Icon due to its very successful operational procedures in the country and in the world as a whole. It offers very low prices through a narrow or limited selection of goods within its market share. They manage this by buying in bulk and reduce their economies of scale. This is the Limited Assortment Concept. Aldi deals in about 700 to 1500 items as compared to its immediate competitor, Wal Mart that deals in 25,000 items. The stores give the focus onto the items under very frequent use and continue to spice up its selection with weekly special offers on items like DVD players and the house wares (Accountancy Age 2005). Tesco
On the other hand, Tesco has over 492,000 employees, operating in it’s over 5,380 stores across the world. It has branches in over 14 countries across the globe. The firm came up in the mid 1920s. Jack Cohen is the founder of the company. He successfully released its first brand in the market in the year 1924. From that time, the company expanded to higher levels year after year. In the 1930s, Cohen opened headquarter in China increasing its customer coverage as well as rising the earnings.
The organization earned a license as a private limited company in 1932. The company thrives through a strategy of buying the rival companies in the market. For instance, in 1950s, the company absorbed 70 Williams’ stores and 200 Harrow stores. The company realized high profit margins in the following years. The trend to absorb other companies and stores in the market continued when Tesco bought 97 Charles...