Real Madrid Financial Analysis

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Introduction of Real Madrid Real Madrid CF is a professional football and basketball club founded in 1902 in Madrid, Spain. It has been the most successful team in the 20th century as voted by FIFA. Real Madrid also sells football and basketball kits like jackets, shorts, tracksuits, polos, pants, training tops, accessories, footwear, watches, hoodies, nightwear, T-shirts, jewelry, gifts, and many other products online. Formerly Real Madrid was known as Madrid Foot-Ball Club and later changed its name to Real Madrid C.F. in June 1920. Question 1 (a) Explain the auditor opining about the financial information of the company for 2015. Answer 1) According to the auditor’s report the financial statements prepared by real Madrid club give a true …show more content…

International Accounting Standards board and is applicable all over the world except US. GAAP is the accounting principles which are applicable only in United States. The company applies the GAAP basis of accounting. Question 1 (c) How Company applied the IAS and IFRS covered in this course in its financial statements for 2015. Explain. Answer) In this course we have studied 6 IAS which are: IAS 1- tells us about the presentation of financial statements, the overall and minimum requirements and in which manner we should structure them, it also outlines all the principles and requires a set of financial statements to be prepared which are the balance sheet, income statement, statement of cash flows, statement of equity, notes to the accounts. IAS 7 – requires a company to prepare the statement of cash flows and it is one the main part of the financial statements. The cash inflow and out flows are classified in to operating activities, investing activities and financing activities. IAS 16 – tells us about the accounting treatment for property plant and equipment, i.e. using a revaluation model, and also calculating a depreciating amount which will be allocated over the useful life of the …show more content…

IAS 23- requires the borrowing costs which are directly related to the acquisition or in the production of qualifying asset those cost should be added to the cost of the asset. Rest of all the other borrowing costs should be treated as an expense. IAS 29 – tells about the guidelines on how to prepare and report financial statements in a hyper inflated economy. Out of this 6 IAS one of them is not applied in this company that is IAS 29 (Hyperinflation) because the company does not meet any of the 5 criteria for hyperinflation economy Question 2) what are characteristics of the economic environment of a country which declares the country as a Hyperinflation economy. Explain with respect to your selected company. Answer) We can say that country is a hyper inflated economy when; 1) People start investing in building, land, property or any other stable currency to maintain purchasing power. 2) People starting quoting their local currency in the form of another stable currency. 3) Purchases and sales on credit take place due to loss in purchasing power. 4) Wages, prices, interest rates are linked to a consumer price

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