1 . Identify the key accounting policies (step 1) and first areas of accounting flexibility (step 2) pertaining to Euro Disney
Key accounting policies
•Euro Disney Associés has wanted financial lease contract. The company leases the Disneyland Playground from Pound Disneyland S i9000. N. C. EDL Resorts S. C. A., which is owned pertaining to 99, 99% by Euro Disney Associés, leases the hotels by a special-purpose financing company. •The special-purpose financing companies are completely consolidated in Euro Disney’s financial assertions. The element of the relationship between the group and these financing corporations is such that they can be effectively regulated by the group.
Parts of accounting flexibility•The personnel is usually transferable between park as well as the hotels and vice versa. In this way, the company copes with the fact that 90% with the employees include a permanent contract. •Euro Disney can delay the obligations of interest, royalties and administration fees that it has to shell out to The Walt Disney organization, when the real performance is no more than the contractually agreed benchmark.
•The debt covenants limit the amount of fresh debt capital that European Disney can attract to $50 mil. 2 . What incentives may influence taking care of reporting approach (step 3)? •The CEO of the Gérant, Philippe Gas, could obtain a discretionary annual bonus based upon the individual functionality relative to the objectives with the company. In addition, he likewise obtains discretionary grants with the company’s investment, The Walt Disney Business stock options as well as the Walt Disney Company’s limited stock. •In 2005, European Disney acquired waivers for sure debt contrat from The Walt Disney Firm. •In 2008, the firm did not recognize any property write-offs which will influences the web income efficiently. 3. What disclosures will you consider an important part of the industry�s annual statement, given it is key achievement factors and key accounting policies (step 4)?
•They have a lot of skilled employees. These trained personnel create added value for the company by improving customer service. To get a very clear image of the workforce of Disney, a detailed social balance sheet and reveal overview of personnel expenses needs to be included in the annual report. •Another disclosure that we would include in the gross annual report is an overview from the depreciation policies (and changes in the depreciation policies) of the set assets inside the Disneyland playground.