Accounting for the furniture, fittings & equipment reserve in hotels
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Author(s)
J. Turner, Michael
Guilding, Christopher
Griffith University Author(s)
Year published
2010
Metadata
Show full item recordAbstract
The somewhat idiosyncratic accounting procedure of maintaining reserves to fund furniture, fittings and equipment (FF&E) capital expenditure in hotels mediated by a management contract is examined. Five research objectives have been pursued: 1) ascertaining contrasting motives of owners and operators with respect to FF&E reserve accounting; 2) determining FF&E reserve accounting approaches adopted in hotels; 3) determining the amount assigned to FF&E reserves in hotels; 4) determining the sufficiency of FF&E reserves in hotels; and 5) appraising the degree of ease with which hotel operators can draw on FF&E reserve funds. ...
View more >The somewhat idiosyncratic accounting procedure of maintaining reserves to fund furniture, fittings and equipment (FF&E) capital expenditure in hotels mediated by a management contract is examined. Five research objectives have been pursued: 1) ascertaining contrasting motives of owners and operators with respect to FF&E reserve accounting; 2) determining FF&E reserve accounting approaches adopted in hotels; 3) determining the amount assigned to FF&E reserves in hotels; 4) determining the sufficiency of FF&E reserves in hotels; and 5) appraising the degree of ease with which hotel operators can draw on FF&E reserve funds. These objectives have been pursued through the analysis of qualitative field data as well as survey data collected in Australia and New Zealand. The study's more significant findings include the determination that, consistent with the wishes of operators, maintaining cash funded FF&E reserves is the most popular approach (particularly in small hotels). It has also been found that FF&E reserves are 40% underfunded. This deficiency beckons a question over whether hotel FF&E reserve accounting serves any meaningful role.
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View more >The somewhat idiosyncratic accounting procedure of maintaining reserves to fund furniture, fittings and equipment (FF&E) capital expenditure in hotels mediated by a management contract is examined. Five research objectives have been pursued: 1) ascertaining contrasting motives of owners and operators with respect to FF&E reserve accounting; 2) determining FF&E reserve accounting approaches adopted in hotels; 3) determining the amount assigned to FF&E reserves in hotels; 4) determining the sufficiency of FF&E reserves in hotels; and 5) appraising the degree of ease with which hotel operators can draw on FF&E reserve funds. These objectives have been pursued through the analysis of qualitative field data as well as survey data collected in Australia and New Zealand. The study's more significant findings include the determination that, consistent with the wishes of operators, maintaining cash funded FF&E reserves is the most popular approach (particularly in small hotels). It has also been found that FF&E reserves are 40% underfunded. This deficiency beckons a question over whether hotel FF&E reserve accounting serves any meaningful role.
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Journal Title
Accounting & Finance
Volume
50
Issue
4
Copyright Statement
© 2010 Blackwell Publishing. This is the author-manuscript version of the paper. Reproduced in accordance with the copyright policy of the publisher.The definitive version is available at http://onlinelibrary.wiley.com/
Subject
Management Accounting
Applied Economics
Accounting, Auditing and Accountability
Banking, Finance and Investment