The 2014 financial. statements of LVMH Moet Hennessey-Louis Vuitton S.A. are presented in Appendix C of this book. LVMH is a Paris-based holding company and one of the world’s largest and best-known luxury goods companies. As a member-nation of the European Union, French companies are required to prepare their consolidated (group) financial statements using International Financial Reporting Standards (IFRS). After reviewing LVMH’s consolidated statement of changes in equity in Appendix C, prepare answers to the following questions:

a. LVMH lists eight equity accounts—Share capital, Share premium account, Treasury shares and LVMHshare settled derivatives, Cumulative translation adjustments, Revaluation reserves, Net profit-group share, Other reserves, and Minority interests. Briefly describe each of these accounts using equivalent U.S. GAAP account titles.

b. At year-end 2014, LVMH reports that its Revaluation reserve totaled 1,019 million euros. If LVMH used a spreadsheet based on the balance sheet equation (A = L + SE), what other account(s) would likely have been impacted by the recording of the Revaluation reserve?

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LVMH GROUP Condensed Consolidated Financial Statements Consolidated Balance Sheet ( millions) ASSETS Brands and other intangible fixed assets. Goodwill... Property, plant and equipment... Notes 2014 2013 2012 Investments in joint ventures and associates. Non-current available for sale financial assets. Other non-current assets. 346780 13,031 12,596 11,322 8,810 9,058 7,709 10,387 9,621 8,694 519 480 483 580 7,080 6,004 9 489 457 519 Deferred tax 27 1,436 913 952 Non-current assets 35,252 40,205 35,683 Inventories and work in progress. 10 Trade accounts receivable. Income taxes Other current assets. Cash and cash equivalents Current assets Total assets. 11 12 14 OF 24 9,475 8,492 7,994 2,274 2,174 1,972 354 223 201 1,916 1,856 1,813 4,091 3,226 2,187 18,110 15,971 14,167 53,362 56,176 49,850