(October, 2011, East Lansing, Michigan)  Hilton Lecture Series XXII on the campus of Michigan State University on September 29-30 presented the latest thinking on International Financial Reporting Standards – and at the same time, helped inaugurate The School of Hospitality Business’s newly-refurbished Culinary Business Learning Lab. <>The lecture series, begun in 1991 by The School’s Hilton Hotels Professor of  Hospitality Financial Management Dr. Ray Schmidgall, addresses a single topic each year, from both the hospitality industry’s and the hospitality academy’s viewpoints.  Over the years, many issues have been discussed, including Ethics, Globalization, Mergers and Acquisitions, Trends in Franchising, Leadership, and Hospitality Valuation.

This year’s lectures were brought by Arlene Ramirez, controller for the Club at Carlton Woods, near Houston, TX, for the industry viewpoint; and by Dr. Ersem Karadag, associate professor of hospitality and tourism administration at Robert Morris University, for the academic viewpoint.   

Ms. Ramirez has extensive experience in all areas of hospitality accounting and finance and it ranges from the property level all the way to the corporate environment – and she has also been an adjunct professor in the Conrad Hilton College of Hotel Restaurant Management at the University of Houston.

A member of the Hospitality Financial and Technology Professionals for over 20 years, Ms. Ramirez has been president of the HFTP Houston Chapter and has served on the International Board for three years.  She is an author, speaker, and trainer to several organizations, and has earned an MBA from Sam Houston State University, as well as the Certified Hospitality Accounting Executive (CHAE) and Certified Hotel Educator (CHE) distinctions. 

Dr. Karadag teaches a wide range of hospitality management courses at Robert Morris, and draws upon his 16 years of industry experience as a financial controller and financial director in hotel properties in the U.S. and internationally.  His research mainly focuses on hospitality managerial accounting and information technology.

Ms. Ramirez spoke to undergraduate students and faculty on Thursday morning.  Some of her salient points included:

• The IFRS (international financial reporting standards) provides a standardized financial reporting system as the world moves towards a truly global economy.
• The current US based system referred to as GAAP (generally accepted accounting principles) is rules-based while the IFRS is principles-based.
• A major advantage of the US adopting the IFRS would be the increase in competitiveness of US companies and capital markets by eliminating barriers.
• Most other countries have adopted the IFRS while the US is one of the few countries that still is resisting making the change.

Dr. Karadag addressed students and faculty the following day, noting the following:

• To illustrate the rules vs. the principles differences, consider a family with a teenager.  The time to be home according to the rule is 11 pm, while the principle would be to be home at a reasonable time.  For an older teenager, the rule might be midnight while the principle would still be at a reasonable time.
• US GAAP contains more than 25,000 pages of detailed guidance for US companies while the IFRS contains approximately 2,500 pages.
• A major difference between the two systems that will impact hospitality firms is the accounting for property and equipment.  Under GAAP these assets are written down over time while under IFRS they may be written up if there is an active market for the assets.
• A second major difference is that IFRS requires component depreciation while GAAP does not.  This can be illustrated as follows: under GAAP a hotel building would be depreciated over 40 years while under IFRS the cost of the building would be divided into its components such as roof, flooring, others.  Each component is depreciated over its useful life rather than the 40 years as with GAAP.  Thus the roof might be depreciated over its expected life of, say, 20 years under IFRS rather than the 40 years under GAAP.

Both speakers clarified the arguments for and against IFRS in ways that students could understand and relate.  “We are fortunate to have had Ms. Ramirez and Dr. Karadag with us,” said Dr. Schmidgall afterward. “They illuminated a complicated subject.” 

Thursday evening, September 29, participants in the lecture series, faculty members in The School, and administrators in the Broad College of Business, including the Dean of the Broad College, Stefanie Lenway, and her husband, Tom Murtha, gathered for a “soft” opening of The School’s J. Willard and Alice S. Marriott Foundation Culinary Business Learning Lab.  They toured the remodeled space and enjoyed a reception and dinner prepared and served by Professor of Culinary Business Chef Allan Sherwin (BA ’64) and the students in his HB 485 – Hospitality Foodservice Operations class.

About The School of Hospitality Business at Michigan State University
Recognized as the top-ranked hospitality business school, The School has a unique and independent position within Michigan State University’s Eli Broad College of Business at Michigan State University.  Celebrating its 85th anniversary year in 2012, The School has almost 10,000 graduates worldwide, including a number of leading academicians and industry executives who have earned both undergraduate and graduate degrees.  Founded in 1927, The School offers an exceptionally well-crafted curriculum, taught by innovative professors who are leading textbook authors, sought-after consultants, and respected researchers.