Pub group Regent Inns this week revealed it had incurred costs of more than #700,000 in resolving accounting problems at its head office.
In the group?s preliminary results statement, finance director Paul Huberman stated that remedies to recent infrastructure problems had been initiated, including the recruitment of a second financial controller, a processing manager and three additional management accountants ? bringing the finance department staff to 27. The process is designed to strengthen the company?s entire infrastructure.
Following his appointment in March this year, Huberman launched a review which revealed that the quality and detail of the accounting, budgeting and information systems were insufficient for the group?s size. Huberman attributed the problems to ?the rapid expansion of Regent over the past two years, along with the physical separation of the accounts department from the group?s head office, and the increasing complexity of the group?s operations?.
Regent, whose interests include the Jongleurs comedy club chain, has attempted to improve its financial reporting to provide shareholders with greater and more useful information on its activities. Accounting policies have also been more fully explained.
Among Regent?s policies, the review states that the company capitalises interest on all developments, irrespective of tenure, as it believes interest is a proper cost of creating the relevant asset. Rents incurred before an outlet opens are regarded as a development cost and are also capitalised.
?Pre-opening costs are defined and written off in the first 12 months of trading,? the report adds. ?Certain head-office costs relating to staff involved in the development of trading outlets and computer software are capitalised.?
Any unrealised profit on contracting works for its 49%-owned associate, Across the Miles Communication, is provided in the balance sheet and only released to profit if the relevant outlets are sold.
Huberman also outlined IT investment of more than #1m.
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