Corporate Accounting: Comparative Analysis of JB Hi-Fi and Harvey Norman Holdings Limited

HI5020 Corporate Accounting
1

EXECUTIVE SUMMARY
Globalisation has brought all the organisations of the world on a common parlance.
There is a need to make the corporate reporting open and transparent. The current report is
based to highlight the same requirement. The two big competing corporations in the retailing
industry in Australia, JB Hi-Fi and Harvey Norman Holdings Limited are taken as the
reference companies for this assignment.
2

Table of Contents
EXECUTIVE SUMMARY........................................................................................................2
INTRODUCTION......................................................................................................................3
JB HI-FI LIMITED....................................................................................................................4
HARVEY NORMAN LIMITED...............................................................................................4
OWNERS’ EQUITY..................................................................................................................4
QUESTION (i)...........................................................................................................................4
QUESTION (ii)..........................................................................................................................5
CASH FLOW STATEMENT....................................................................................................5
QUESTION (iii).........................................................................................................................5
QUESTION (iv).........................................................................................................................7
QUESTION (v)..........................................................................................................................8
OTHER COMPREHENSIVE INCOME STATEMENT..........................................................8
QUESTION (vi).........................................................................................................................8
QUESTION (vii)........................................................................................................................9
QUESTION (viii).......................................................................................................................9
QUESTION (ix).......................................................................................................................10
ACCOUNTING FOR CORPORATE INCOME TAX............................................................10
QUESTION (x)........................................................................................................................10
QUESTION (xi).......................................................................................................................10
3

QUESTION (xii)......................................................................................................................10
QUESTION (xiii).....................................................................................................................11
QUESTION (xiv).....................................................................................................................11
QUESTION (xv)......................................................................................................................11
QUESTION (xvi).....................................................................................................................11
CONCLUSION........................................................................................................................12
REFERENCES.........................................................................................................................12
4

INTRODUCTION
With the ramified changes, every Organizaiton needs to use proper financial reporting in it
books of accounts. Before a discussion can be made regarding the things to be discussed in
the report, a brief understanding of the two companies is required. This report has been used
to make an assessment and gather an understanding of the major requirements that are
essential for the analysing the financial details of two company. Every detail has been carved
in a form of comparative analysis between both the companies.
JB HI-FI LIMITED
JB Hi-Fi is in the business of retailing and is listed on Australian Stock Exchange. The
company is a market leader when it comes to electronics and supersedes when it comes to the
sale of DVDs, CDs, mobile phones, video games, and etc. Melbourne marks the area where
the shopping centre of the company is located.
HARVEY NORMAN LIMITED
Working in the retailing industry at a multi-national level, Harvey Norman works in the
business of furniture, computers, bedding, communications, and certain electrical products
sold in the consumer market. The operation of the company is maintained in the franchisee
form. All the operators intended to the business are required to operate as a franchisee of the
company.
OWNERS’ EQUITY
QUESTION (i)
The table presented down gives a list of the individual items of each of the company’s equity:
SHAREHOLDERS’ EQUITY JB HI-FI LIMITED HARVEY
NORMAL
LIMITED
Common stock 441,700,000 388,381,000
5

Other equity 39,100,000 199,000
Retained earnings 463,200,000 2,337,241,000
Accumulated other comprehensive income 3,600,000 185,185,000
Total stockholders' equity 947,600,000 2,911,006,000
The different components presented in the shareholders’ equity are explained as follows:
COMMON STOCK:
Common shares are on the preferable list of some of the investors due to their high risk and
high profit nature. The common stocks for both JB Hi-Fi and Harvey Norman Holdings have
shown a rise in the year 2018 due to issuance of new shares (Lashgari, 2015).
OTHER EQUITY:
The kind of owned instruments that do not fall in the common stock are included in the
equity instruments. These include securities having equity nature. E.g. share warrant
instruments, notes, share papers, and etc. A rise is also shown as compared to the previous
financial years in case of both the companies.
RETAINED EARNINGS:
The retained earnings represent the share of profits that the company has earned over a
couple or the current financial year and has used the same by investing it back in the
company. No dividends have been paid or reserves been made out of this share. An increment
in the retained earnings shows that the company is good at its profitability and is able to save
enough after paying of all the due obligations and dividends. This strength is seen in the case
of both the companies used in the current assignment (Baloch, et. al 2015).
ACCUMULATED OTHER COMPREHENSIVE INCOME:
6