Adidas Group

SEC 10-K - Adidas Group

Introduction

The considerations of the investors are to invest in those companies which are highly authentic. Companies that are filling to the SEC offers a valuable and reliable information for the investors and shareholders due to the fact that they need to submit their updated financials to the SEC with proper explanation for each increase or decrease in the heads of financial statements.

Hence, this report will focus on the Adidas group's the most recent SEC 10-K filing in which the company's financial statement has been evaluated with authentic reasoning.

Discussion

Overview of the company

Adidas Group is as German based company which has been a global leader in the area of sport good industry and comprises of wide range of sport good portfolio. It was founded in 1924 and has been a manufacturer and distributor of sport product across the globe.

There financial fiscal years ends at December 31st according to the IFRS as adopt by the EU and requirement of the German Commercial Law Pursuant to 315a(1). The financial Statement has been audited by KPMG AG.

Financial Analysis of year 2011

In this section, the main assets and liabilities explanation will be give due to the large amount of money and activities involved.

Cash and Cash Equivalent: This head presents cash at bank, cash on hand and short term deposits with three years of maturities or less that AG consist of. They are high liquid assets for Adidas as they can easily be converted in cash without any risk.

Receivables and other financial assets: The recognition of Adidas Receivables and other financial assets these are at fair value which is match to the current receivable nominal value. In case of non-current receivables, the estimation of the value is at present value of the future discounted cash value ate market interest rate.

Inventories: These are valued at the cost of lower value or net realizable value. This is measured with sale price subtracting the completions cost and cost needed to make the sale. This cost comprises of raw material cost, direct labor and manufacturing overhead. Over head allocation of Adidas goods is based on the average usage.

Borrowing and Other liabilities: Through the method of Effective interest rate, the Borrowing and Other liabilities of Adidas is recognized at fair value. As far as Adidas long term borrowing is concern, they are avowed at amortized cost using same method. In income Statement, the difference between the proceeds and redemption has been recognized.

Other provision and Accrued Liabilities: The recognition of other provisions is based on the present requirement which can be legal or constructive. This present requirement is incurred by the third party that is due to the previous events. As far as accrued liabilities is concern, they are the one for which payment has to be made for goods received or supplied.

Recognition of the Revenue: The recognition of the revenues is based at fair value whether they are invoices, receivables, trade discount etc. Income from commission and royalty is ...