Groupe Chez Gerard, the restaurant chain, has been ordered by the UK’s financial reporting watchdog to change its depreciation policy, forcing the company to restate its 2000 accounts.
The Financial Reporting Review Panel said Chez Gerard had not properly applied the rules of FRS 15, the accounting standard that deals with tangible fixed assets.
The news came as Chez Gerard released its preliminary results for the year ending 1 July 2001, showing the company had made a pre-tax profit of #2m.
But the restated accounts for the previous year revealed that they would have had to announce an increased loss of #2.85m.
FRS 15 came into effect on 23 March 2000, leading Chez Gerard and other restaurant chains to review their existing depreciation policies.
Previously the company had not depreciated its freehold or long leasehold premises, but the new policy involved depreciating them over 50 years or the life of the lease.
But the FRRP took issue with the way revisions to the useful economic lives and residual values of the assets were calculated on adoption of the new standard.
More at www.chezgerard.com.
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