Besserbrau Essay

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Besserbrau AG Besserbrau AG is a German beer producer headquartered in Ergersheim, Bavaria. The company was founded in 1842 by brothers Hans and Franz Besser and is publicly traded with shares listed on the Frankfurt Stock Exchange. Brewing in strict accordance with the almost 500-year-old German Beer Purity Law, Besserbrau uses only four ingredients in making its products: malt, hops, yeast, and water. While the malt, yeast, and water are obtained locally, Besserbrau imports hops from a company located in the Czech Republic. Czech hops are considered to be among the world’s finest. Historically, Besserbrau’s products were marketed exclusively in Germany. To take advantage of a potentially enormous market for its products and expand sales, Besserbrau began making sales in the People’s Republic of China three years ago. The company established a wholly-owned subsidiary in China (BB Pijio) to handle the distribution of Besserbrau products in that country. In the most recent year, sales to BB Pijio accounted for 20% of Besserbrau’s sales and BB Pijio’s sales to customer in China accounted for 10% of the Besserbrau Group’s total profits. In fact, sales of Besserbrau products in China have expanded so rapidly and the potential for continued sales growth is so great that the company recently broke ground for the construction of a brewery in Shanghai, China. To finance construction of the new brewery, Besserbrau negotiated a listing of its shares on the London Stock Exchange to facilitate an initial public offering of new shares of stock. Required: Discuss the various international accounting and finance issues confronted by Besserbrau AG. 1. Importation of hops from a company located in the Czech Republic. Czech Republic has a different currency. It has the Czech Koroun and because of that Besserbrau has to pay attention on the foreign

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