IAS 10 para 9(a), adjusting event, settlement of legal case

ASOS Plc – Annual report – 31 August 2016

Industry: retail

23 CONTINGENT LIABILITIES AND POST BALANCE SHEET EVENTS

From time to time, the Group is subject to various legal proceedings and claims that arise in the ordinary course of business which, due to the fast-growing nature of the Group and its ecommerce base, may concern the Group’s brand and trading name or its product designs. All such cases brought against the Group are robustly defended and a liability is recorded only when it is probable that the case will result in a future economic outflow which can be reliably measured.

On 2 September 2016, ASOS reached a full and final global settlement of £20.2m for the trademark infringement disputes brought against it by Assos of Switzerland (a high-performance cycle-wear brand), and Anson’s Herrenhaus (a German menswear retailer) which has been presented, along with associated legal fees of £0.7m, as an exceptional item in the financial statements. At 31 August 2016, there were no other pending claims or proceedings against the Group which were expected to have a material adverse effect on its liquidity or operations.

At 31 August 2016, the Group had contingent liabilities of £7.3m (2015: £3.6m) in relation to supplier standby letters of credit, rent deposit deeds and other bank guarantees. The likelihood of cash outflow in relation to these contingent liabilities is considered to be low.

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