Revenue recognition, accounting enforcement and error correction : The case of Borussia Dortmund GmbH & Co. KGaA
- As a consequence of accounting scandals, Germany - like many other countries - set up a supervisory body to control the compliance of listed companies with accounting regulations. The Financial Reporting Enforcement Panel (FREP) assumed their duty in July 2005 and has forced a number of companies to restate their financial statements. This case study covers one of the cases of FREP and iites students to reflect on the enforcement of financial reporting standards. Borussia Dortmund GmbH & Co KGaA entered a sponsoring contract with the sports equipment provider Nike, Inc and recognized parts of the yearly payments as soon as they had signed the contract. The FREP criticized this approach as the payments should have been recognized proportionately over the life of the contract. By examining the substance of the contract and the corrections made by the company, the case reviews both revenuerecognition under IAS 18 and error correction according to IAS 8.
Document Type: | Course Material |
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Language: | English |
Author: | Henning ZülchORCiD, Dominic Detzen |
Chairs and Professorships: | Chair of Accounting and Auditing |
URL: | https://www.thecasecentre.org/products/view?id=99274 |
Year of Completion: | 2011 |
Article Number: | 111-009-1 |
Page Number: | 13 |
Tag: | Error correction; Financial reporting enforcement; Germany; IFRS; Revenue recognition; Soccer club |
Content Focus: | Teaching / Learning Audience |
Licence (German): | ![]() |