Entertainment and hospitality industry is one of the most high-potential and fast growing sectors of economy. Currently, the global entertainment industry is represented in Russia by “mega-complexes” — huge entertainment centers, which offer a wide range of recreation and entertainment services to consumers.
Over many years we have been helping our clients to resolve complex issues and open up new growth paths. We have extensive experience of servicing companies active in entertainment and hospitality sector.
Our experience and knowledge will be of practical assistance to you in tackling issues related to achieving high profitability of your business. We help companies to identify new growth areas and react promptly to any changes in business environment.
A foreign company - an organizer of international sports competition in Russia engaged us to provide consultation regarding tax consequences associated with payment of fees to foreign participants of competition.
Lack of a tax status in Russia prevented the company to pay Personal Income Tax by itself de rigore juris. As a result of a specially tailored approach we developed and approved with tax bodies, we were able to organize and ensure filing of tax returns and centralized tax payments.
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Baker Tilly Russia specialists took part in an audit review of financial statements of a company prepared for the first time in accordance with IFRS. The company sells specialized software for hospitality industry in Russia and CIS countries and provides a wide range of services - from preparing and tuning up ordered equipment and training client employees to installing, testing and commissioning a system. Due the above, the company encountered rather complex methodological issues when attempting to apply IFRS 1 "First application of IFRS", in particular: correct accounting, allocation and reflecting expenses on individual projects and products.
The above challenges were resolved by way of developing meticulously detailed and thoroughly spelled out by auditors Terms of Reference implemented on the basis of a software module available in the company and designed for employee work time and task tracking. Then, in an efficient collaboration with auditors the company trained the required employee teams for accounting and allocating payroll expenses in accordance with particular projects each employee works on.
In addition, based on the knowledge of company specialists and the auditors' experience a list was compiled of other significant expenses having direct relation to creating software products, and average life cycle was determined for each product. Such information was subsequently included as part of IFRS accounting policy of the company.
Our specialists identified terms and conditions of taxation and determined taxable market value of film industry products subject to customs duty when crossing customs borders of the Russian Federation (11 high-budget motion pictures) within framework of a litigation brought by RF Federal Customs Service against one of the largest film distributors in the RF.
Our specialists performed valuation of the largest national theme-based fun fair of Russia in order to attract investments from one of the largest state banks.
Our experts determined market value of a 3-star hotel in Cabo Verde for the largest national air carrier within the framework of a proposed purchase-sale transaction.
One of our clients is an investor, real estate developer, owner and operator of luxury 5-star hotels in various countries of the world. As the company has representative offices in various countries, we, as auditors of its separate component, were involved in auditing financial statements of the Russian representative office prepared in compliance with the accounting policy of the entire group.
Among the most significant issues the client faces every year is fair market price appraisal for investment real estate property, reconcilement, confirmation and levying accounts receivable, as well timely inventory taking at the hotel with participation of auditors.
As a result of an efficient collaboration with auditors we were able to set up, within a rather tight timeframe for submitting audited financial statements to the head office, efficient procedures for reconciliation of accounts with counteragents, for auditing independent appraiser reports by auditors for the purposes of calculation of fair market value of investment real estate property, as well as efficient and timely procedures for inventory taking in hotels with participation of auditors and observance of all requirements, in accordance with the specifics of the representative office's activity and internal policies of the group.