Company Accounting Analysis 2022

Running Head: COMPANY ACCOUNTING
Memorandum
To: Board of Directors
From:
CC:
Date: August 23, 2019
Subject: Introduction of JB Hi-Fi and Analysis of Consolidation
This memorandum is prepared with the aim to do the analysis of the consolidation aspects of
JB Hi-Fi, which would be helpful for assisting the directors as well as stakeholders for
understanding the performance, business, composition as well as the management of the
business in the better way. The JB Hi-Fi company is the retailer of Australia, having listed,
which sells as well as specializes in the consumer goods. The company is headquartered in
Australia and has their locations in the New Zealand and Australia. JB Hi-Fi prepares the
consolidated financial reports for providing the financial statements that are relevant as well
as comparable (Investors.jbhifi.com.au. 2019).
The consolidated financial statements of JB Hi-Fi are based on financial statements of parent
company as well as their controlled entities. These consolidated financial statements helps in
incorporating the liabilities, assets as well as the results of principal subsidiaries according to
the policy of accounting. The principle of the company for the consolidation includes the
principal for subsidiaries and for the changes in the interests of the ownership. The company
controls its subsidiaries. The subsidiaries are consolidated in full from the date at which the
control has been transferred to the Group. In the consolidated financial statements, the non-
controlling interests in outcomes as well as subsidiaries equity are separately shown. The
investments in the subsidiaries are being accounted for at the cost less impairments, if any in

1COMPANY ACCOUNTING
JB Hi-Fi separate financial statements. Moreover, JB Hi-Fi treats the transactions with the
non-controlling interest, which does not results in the loss of the control as the transactions
with company’s owners of equity. The changes of ownership interests’ results into the
adjustments between the amounts of carrying of their controlling interest and non-controlling
interest for reflecting their interest that is relative in the subsidiary. There is recognition in the
separate reserve within the equity that is attributable to JB Hi-Fi Ltd., in case if there is any
difference between adjustments amounts to the non-controlling interests as well as any
received or paid recognition (Investors.jbhifi.com.au. 2019).
JB Hi-Fi Ltd. helps in recognizing the importance of social, environmental as well as matters
of governance to the customers, shareholders as well as customers. There is continuous
monitoring as well as reviewing of the developments in the corporate governance that are
relevant for Group. The management and the directors of group are committed for ensuring
that the business of the Group is ethically conducted and is according to the highest standards
of the corporate governance. The policy as well as practices of the Group complies in all the
materials with the 3rd edition of ASX corporate governance council principles as well as
recommendations. It has also complaint with principals’ spirit contained in ASX
recommendations (Investors.jbhifi.com.au. 2019).
The company is exposed with the risks of economic sustainability risks, environment
sustainability risks as well as social sustainability risks. They makes every attempts for
minimizing the risks by creating or preserving the value for their shareholders over short-
term, long-term and medium-term. JB Hi-Fi is committed towards participating in the
sustainability program of Victoria TAKE 2 that is the collective program of the climate
change, which supports the business, individuals, government as well as other organizations
for helping Victoria for achieving the emissions to net zero by the end of 2050 (Berger, P.G.,
Minnis and Sutherland 2017).

2COMPANY ACCOUNTING
The Audit and the committee of risk management are committed towards assisting the Board
in the oversight of integrity as well as reliability of the financial disclosures and reporting,
financial management as well as related disclosures practices and non-financial reporting of
the Group. This committee also assists the oversights of external auditor’s independence,
appointments, removal as well as performances. Moreover, they reviews on the policies of
the Group on the risk management and insights as well as discharging of their responsibility
for satisfying themselves that sound and adequate system of internal control as well as risk
management are being implemented for managing material risks, which affects the business
of the Group including the compliance to all the laws applicable. The audit as well as
committee of risk management is comprised of four non-executive directors who is Beth
Laughton, Wai Tang, Stephen Goddard and Mark Powell, all of them are independent with
the experience of relevant commercial, financial and risk management that include an
independent chair, who are not chair of board (Cîrstea 2014).
As per the company’s consolidated balance sheet for the year 2018, $1,210.5 was the current
asset and $917.2 was the current liabilities, which means 1.32 was the current ratio for year
2018. JB Hi-Fi is having more current assets as compare to the current liabilities, which
means the company is in the good position of solvency (Sedki, Smith and Strickland 2014).
Goodwill of the company is represented by the excess of acquisition cost over the fair value
of the shares of company of acquired net identifiable assets at acquisition date. If the cost is
less than the identifiable net assets of the fair value then there is occurrence of gain on
bargain purchase. Goodwill is found in the section of non-current assets on the consolidated
balance sheet and the notes. The opening net book amount of goodwill was $49.5m after that
$712.2m was added because of the business combination and the impairment charges of
$14.7 has been deducted. Hence, $747 was the net book amount of goodwill at the year-end