Given the latest news of Asda slashing prices to maintain/increase its position of 5% less than the other mults, knowing that any growth in flatline has to come at the expense of direct competition, coupled with Tesco’s ending of their 32 year relationship with auditors PwC, itself a reminder that the SFO are at work investigating how Tesco’s £263m profit overstatement was caused in part by how retailers book trade investment, all adds up to a need for retailers to disclose the contribution made by commercial income to their final results.
Indeed the recent criticism of Sainsbury’s for not following Tesco and Morrisons lead in making these disclosures, with little sympathy for protestations of ‘commercial sensitivity’, means that the SFO will probably conclude that disclosure will be mandatory...
However, better if all retailers anticipate legal developments and make these disclosures on a voluntary basis.
This leaves Asda, which, being US-owned, and ultimately subject to a changing tax regime where issues of global taxation will drive more open reporting at local level, will inevitably conform re disclosure of commercial income in the UK.
The rest of the trade will probably fall in line to avoid possible raising of their profile at the SFO…
Auditing will become more precise, in terms of accounting for, and booking of, such revenues.
This means that stakeholders will need to anticipate that all CI ‘buckets’ will be defined more precisely, have clearer objectives, appropriate KPIs and will be measured with more precision. In other words, we are headed towards payment in arrears, based on actual boxes sold…
Time for suppliers and retailers to anticipate the obvious and start accounting now…
Indeed the recent criticism of Sainsbury’s for not following Tesco and Morrisons lead in making these disclosures, with little sympathy for protestations of ‘commercial sensitivity’, means that the SFO will probably conclude that disclosure will be mandatory...
However, better if all retailers anticipate legal developments and make these disclosures on a voluntary basis.
This leaves Asda, which, being US-owned, and ultimately subject to a changing tax regime where issues of global taxation will drive more open reporting at local level, will inevitably conform re disclosure of commercial income in the UK.
The rest of the trade will probably fall in line to avoid possible raising of their profile at the SFO…
Auditing will become more precise, in terms of accounting for, and booking of, such revenues.
This means that stakeholders will need to anticipate that all CI ‘buckets’ will be defined more precisely, have clearer objectives, appropriate KPIs and will be measured with more precision. In other words, we are headed towards payment in arrears, based on actual boxes sold…
Time for suppliers and retailers to anticipate the obvious and start accounting now…
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