PARIS — Swatch Group is set to change its accounting practices back to Swiss GAAP ARR measures as of Jan. 1, 2013. The group has used International Financial Reporting Standard (IFRS) practices since 2001.
“Swiss GAAP allows the Swatch Group, as a Swiss company, to use a recognized accounting practice that is ideal for industrial companies,” Swatch stated. “The cost-benefit ratio is reasonable and takes account of the special needs of a Swiss industrial company.”
The firm said Swiss GAAP measures were “more practical and less theoretical” than IFRS practices. The decision was made at a meeting of Swatch’s board of directors Wednesday.
Thomas Chauvet, European luxury goods director at Citi Research, called the change a “surprising backward move” in a research note. “We think the market will react negatively to this,” he wrote.
Chauvet said Swatch would be the only large-cap, blue-chip company on the Swiss stock market to report under Swiss GAAP.
“In a Swiss watch industry famous for its secrecy, the return to Swiss accounting principles is likely to raise concern over the quality of accounting disclosures and comparability with European luxury peers, which all report under IFRS, in particular Richemont,” Chauvet added.
Swatch shares on the Swiss stock exchange fell almost 1 percent to 376.10 Swiss francs, or $401.06 at current exchange, at 11 a.m. CET. That followed a 1.3 percent decline of the firm’s stock price on Wednesday.
"I was driving back on Saturday afternoon from the beach, and I just saw this sign saying 'Skydiving for $95.' And I was like, I can't not sky dive for $95," says Tom Bateman about a moment in Hawaii while shooting "Snatched." #wwdeye (📷: @vsteves; Interview by @ktauer; Styled by @thealexbadia)