USALI vs IFRS: Bridging Operational and Financial Reporting in Global Hotels

Why global hotels need both frameworks

Financial reporting in the hotel industry rarely follows a single rulebook. Global hotel groups, from Accor to Marriott, prepare their consolidated statements under IFRS to meet regulatory and investor requirements, yet they manage individual properties and contracts using USALI, the Uniform System of Accounts for the Lodging Industry.

At Antravia, we see this dual reporting challenge daily. IFRS provides compliance, comparability across industries, and audit credibility. USALI delivers operational consistency, transparency, and performance benchmarking specific to hospitality. Successful hotels use both, meaning IFRS for the entity, USALI for the operation.

What is IFRS?

International Financial Reporting Standards (IFRS) are developed by the International Accounting Standards Board (IASB) and adopted by over 140 jurisdictions worldwide, including the UK, EU, UAE, and much of Asia and Africa. IFRS ensures consistent recognition, measurement, and disclosure across companies and industries.

For hotels, the most relevant standards include:

• IFRS 15: Revenue from Contracts with Customers

• IFRS 16: Leases

• IAS 1: Presentation of Financial Statements

• IAS 7: Statement of Cash Flows

• IAS 12: Income Taxes

• IAS 21: Effects of Changes in Foreign Exchange Rates

• IAS 38: Intangible Assets (e.g., management agreements, brand licences)

What is USALI?

The Uniform System of Accounts for the Lodging Industry (USALI) is a management accounting framework maintained by HFTP’s Global Finance Committee. Its aim is to standardise hotel reporting by department, Rooms, Food & Beverage, Spa, Golf, Conference, so that owners, operators, and lenders can compare results consistently across properties and brands.

USALI is not a legal framework; it is an operational reporting system used globally by hotels reporting under IFRS, US GAAP, or local GAAP. The 12th Revised Edition (effective January 1, 2026) adds new schedules for sustainability, loyalty programmes, and non-operating costs, reinforcing its alignment with IFRS principles.

Key differences between IFRS and USALI

Under IFRS, the purpose of reporting is statutory compliance, investor reporting, and audit assurance. By contrast, USALI is designed for operational comparability and performance benchmarking across hotels and departments.

IFRS focuses on entity-level financial statements, including the statement of profit or loss, balance sheet, and cash flow statement. USALI, however, focuses on department-level operating statements such as Rooms, Food & Beverage, and Spa, giving management visibility into each business area.

For revenue recognition, IFRS 15 applies a control-based model, using performance obligations and principal versus agent analysis to determine when and how revenue should be recognized. USALI follows the same recognition timing as IFRS or GAAP but structures revenue across departments like Rooms, F&B, and Other Operated Departments for consistent comparison.

Under leases, IFRS 16 requires hotels to recognize Right-of-Use assets and corresponding lease liabilities, splitting expense recognition between depreciation and interest. USALI instead presents rent as a single non-operating expense within Schedule 11, ensuring that departmental Gross Operating Profit (GOP) remains comparable across ownership or lease structures.

When it comes to management and franchise fees, IFRS allows these to be expensed according to their nature or function without prescribing a specific location in the financial statements. USALI, on the other hand, mandates a dedicated Schedule 10 for Management and Franchise Fees to maintain consistency across hotel reports.

Owner’s expenses are often aggregated under IFRS or disclosed by nature in the notes. USALI requires them to be shown explicitly in the non-operating section for greater transparency.

For replacement reserves, IFRS treats transfers as balance-sheet movements, not expenses, and typically discloses them in the cash flow statement or footnotes. In USALI, these reserves are deducted below EBITDA to present “EBITDA less replacement reserve,” a measure widely used in hotel owner and lender agreements.

Under segment reporting, IFRS 8 applies only to listed groups and follows the structure used by the Chief Operating Decision Maker (CODM). USALI requires departmental reporting in every case, defining standard departmental schedules regardless of listing status or size.

In terms of key performance indicators (KPIs), IFRS does not define hospitality-specific metrics such as ADR, RevPAR, or GOPPAR. USALI explicitly defines and standardizes these metrics and margin definitions so that hotels can benchmark performance across properties and markets.

Finally, for currency translation, IAS 21 requires translation at closing or average exchange rates, with translation differences reported in Other Comprehensive Income. USALI reports results in the property’s local currency to preserve operational visibility, while owners or corporate groups handle currency conversion separately during consolidation.

How global hotel groups reconcile both

Multinational hotel chains typically follow a two-tier approach:

1. Entity-level consolidation under IFRS for statutory and investor reporting.

2. Property-level management reporting under USALI to evaluate GOP, departmental profitability, and brand performance.

Controllers and accountants build mapping schedules that translate USALI departmental statements into IFRS line items. For example:

• USALI Rooms Revenue + F&B Revenue = IFRS “Revenue” line.

• USALI Management Fees → IFRS “Administrative Expenses.”

• USALI EBITDA → IFRS Operating Profit (before depreciation and finance costs).

This reconciliation ensures that management fees, rent, and owner’s costs are classified correctly under IFRS while preserving the operational comparability of USALI.

Common reconciliation challenges

1. Principal vs Agent (IFRS 15)
   Service charges, resort fees, and OTA commissions require principal-agent evaluation under IFRS; USALI may record them differently for internal comparability.

2. Lease recognition (IFRS 16)
   Hotels operating under lease models see material timing differences — IFRS records depreciation and interest, while USALI shows rent as a single expense line.

3. Loyalty programmes
   IFRS requires deferred revenue recognition for points liability; USALI 12th Edition introduces dedicated line items for loyalty costs and reimbursements.

4. Currency translation (IAS 21)
   IFRS demands translation of foreign subsidiaries into group currency, often masking local GOP volatility. USALI keeps results in functional hotel currency, useful for on-the-ground performance management.

5. ESG and sustainability
   The new USALI 12th Edition introduces explicit tracking for sustainability costs and energy reporting — areas not yet mandated in IFRS but increasingly aligned with the IFRS S1/S2 sustainability disclosure standards under the ISSB framework.

Practical steps for finance teams

• Maintain dual ledgers or mapping templates linking USALI Schedules 1–11 to IFRS statement lines.

• Prepare a reconciliation schedule from property USALI statements to group IFRS results.

• Ensure consistent definitions of EBITDA and GOP in owner and lender agreements.

• Document policy differences (leases, loyalty programmes, reserves) in accounting manuals and management agreements.

• Train local finance staff to understand both IFRS compliance and USALI departmental reporting.

Antravia Conclusion

IFRS ensures compliance, credibility, and transparency to investors, whilst USALI ensures comparability, consistency, and accountability to owners and operators. Together, they form the backbone of hotel financial governance.

At Antravia, we help global hospitality businesses reconcile IFRS reporting with USALI management statements, thus aligning local property data with consolidated group results, and ensuring every stakeholder speaks the same financial language.

For support or implementation guidance, contact us

Also available - USALI vs US GAAP: A Guide for Hotels and Accountants

References

• IFRS Foundation: https://www.ifrs.org/issued-standards/list-of-standards/

• HFTP USALI 12th Edition Summary: https://www.hftp.org/downloads/documents/usali/usali12_presentation.pdf

• Accor Annual Report 2024 (IFRS & USALI references): https://group.accor.com/en/investors

• ICAEW Hospitality Accounting Guidance (FRS 102 vs IFRS): https://www.icaew.com/technical/financial-reporting/uk-gaap/frs-102

• ISSB Sustainability Standards (IFRS S1/S2): https://www.ifrs.org/issued-standards/ifrs-sustainability-standards/