Using the new standard, interim turnover was £51.4m compared with £60.7m, calculated in accordance with previous ‘industry practice’.
In a note in its accounts, Merchant Retail said it had historically shown sales from concessions on a gross basis, while the new standard requires such sales to be shown on a net basis.
The Accounting Standards Board rules are meant to prevent exaggeration of revenues and deliver more transparent and comparable figures.
One implication is that department stores with concession outlets within them will no longer be able to get away with including the revenues of concessions in their own results.
Merchant Retail Group, which owns the Perfume Shop chain, and the Joplings and De Gruchy department stores, becomes the first company to announce a dramatic correction.
Mary Keegan, ASB chairman, said: ‘Recent reports of questionable practice have highlighted the need for us to set out best practice.’
The standard dealing with the top line of the profit and loss account means entities should report turnover only when they have performed in accordance with contractual arrangements customers. Guidance is also given on the measurement of turnover where payment terms are deferred.
Does Darwin's theory apply to taxation? Colin ponders...
The EC has been instructed to draft a European Union (EU) directive authorising an EU financial transaction tax, which would apply to ten of the EU’s 28 member states
Accountancy watchdog the FRC has dropped its investigation into the former chief financial officer of Tesco, nearly two years after the supermarket was engulfed in an accounting scandal
Colin imagines how Apple's logo might change in the wake of the EC's ruling over its Irish tax arrangements