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Weekly Catch-Up 26th September

Tuesday 1 October 2019

Accounting Error at M&C Saatchi to cause potential profit loss

An accounting Error at M&C Saatchi has forced the company to downgrade its profit forecast in their half year report. The agency announced a charge of £6.4m to the group’s annual results back in August after an internal review exposed mistakes within their accounting. With the full review due in November, the operating profit and profit before tax is now forecast to be 5-10% down.

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Korea: Crypto is intangible asset according to global accounting standards body

In a report by the Korea Times on Monday it was stated that according to the Korea Accounting Institute, the International Financial Reporting Interpretations Committee (IFRIC) confirmed that Cryptocurrency was neither cash nor financial asset but met the definition of an intangible asset, at a meeting in London in June.

London based IFRIC, who set the International Financial Reporting Standards, concluded in a document dated June 21st that Cryptocurrency did meet the definition of an intangible asset on the grounds that  “(a) it is capable of being separated from the holder and sold or transferred individually; and (b) it does not give the holder a right to receive a fixed or determinable number of units of currency.”

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USA: Accounting Fraud at Comscore leads to $5million settlement

The media measurement firm Comscore and its CEO Serge Matta, have been charged with engaging in a fraudulent scheme that resulted in a $50 million overstatement of revenue, the Securities and Exchange Commission announced today. Within the charges are allegations that Comscore made “false and misleading statements about key performance metrics,”

As a result, Comscore have agreed in a settlement to pay $5 million in penalties with Matta having to pay $700,000 plus a further reimbursement of $1.2 million to Comscore as well as being barred from serving as an officer or director of a company for 10 years.

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South Africa: Pick and Pay record R17bn debt as a result of accounting changes

South African retailer Pick and Pay have reported an increase in their debt from R1.6bn to R17bn for the 53 weeks ending March 3rd as a result of the implementation of IFRS 16. One of the changes needed to be made as a result of the new standards is that companies must bring all their leases on to their balance sheets.

CFO Lerena Olivier claimed that the group had a stable lease portfolio and that the changes would have no effect on the groups net asset value. “IFRS has not changed the fundamental value of our business, or our value creation,” she said.

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