This document discusses the technical aspects of consolidation of Jb Hi Fi. It covers the composition of the group, funding, company's policy, sustainability, and more. The document is useful for students studying accounting and finance.
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1COMPANY ACCOUNTING MEMO To: Board of Directors From: Date: January 02, 2019 Subject: Technical Aspects of Consolidation of Jb Hi Fi Introduction JB Hi-Fi is an Australian store of customer goods, concentrating in video games, DVDs, Blu- rays, Ultra HD Blu-rays, CDs, microchip technology, hardware, electrical home-based applications, mobile and a numeral of Telstra facilities. The company is visibly listed on the ASX. Its Head Office is located at Chadstone Shopping Centre in Melbourne. In the year 2006-07, the company extended into New Zealand. Composition of the Group The subsidiaries of the company are: In Australia: JB-HI-FI Group Pty Ltd Clive Anthonys Pty Ltd Rocket Replacement Pty Ltd M.E.W (Australia) Pty. Ltd The Muir Finance Company Pty In New Zealand: JB HI-Fi Group (NZ) Limited
2COMPANY ACCOUNTING JB Hi-Fi NZ Limited. Audit Committee The Non-Executive directors: Bth Laughton (on going member and chair of committee) Gary Levin (Member of the Committee until 27thOctober 2016) Wai Tang (On going member of Committee) Mark Powell (On going member of committee since 13thMarch 2017) Remuneration committee Beth Laughton (on going member of Committee) Gary Levin (Member of the Committee till 26thOctober 2016) Joint Venture- The Good Guy Stores JB Hi-Fi Limited is unique of the sphere concession vender for branded home-based entertaining products. These specific Group products emphasis on customer electronics, software as glowing as electronic merchandises such as melody, playoffs and cinemas (Jbhifi.com.au 2017). JB Hi-Fi Limited functions from stand-alone terminus positions as well as supermarket middle localities in and all over the place accessible stores particularly in Australia and New Zealand. Preparation of consolidated financial statement The annual report of JB HI-FI Limited has stated that the arrangement of the financial statement of the corporation has been complying with the International Financial Reporting Standards that is required by Accounting Standards AASB 101. It is stated in the integrated report. (Jbhifi.com.au 2017).
3COMPANY ACCOUNTING Funding of the group Beth Laughton, is the chairperson of the audit committee managing risk of GPT. The responsible for funding GPT Wholesale Shopping Centre Fund. The company arranges fund through merger and acquisition debt finance. For the acquisition of the Good Guy debentures were sold at pro-rata basis. For group acquisition company undertook pro-rata entitlement. The company issued 0.4 million ordinary shares according to Group`s share option plans. (Karadag, 2015). Company`s Policy Corporate Governance The annual report of JB HI-FI Limited has not stated regarding the corporate governance policies clearly. The firm has specified that it has trailed the applicable corporate governance standards but nonentity is stated regarding the policies of corporate governance. Furthermore, the annual report of the entity has not sustained AASB 137 appropriately. Audit Committee The company has specified the audit and risk management committee in the investors and governance section. The committee basically charge in assist the board to oversight the relevance along with the integrity of the Group`s fiscal reporting and management disclosure also includes non-fiscal reporting. As per the AASB standard the company is liable to disclose the audit committee in the report. Sustainability The company has disclose environment, social as well as economic sustainability reportintheannualreport.Theeconomicsustainabilityindicatedaboutthebusiness strategies and future prospects along with managing the risk that is associated with it. The detail explanation of the strategies are disclosed in the Operating and Financial Review.
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4COMPANY ACCOUNTING The environment sustainability disclose that the Group is capable of operate in such manner that does not affect the ecosystem. The report indicated that there was no such exposure for the risk towards environment. There were several measures also implemented to reduce the operations impact on the environment. JB-HI-Fi business involved in the Carbon Disclosure Project along with the Australian Packaging Covenant including different types of recycling initiatives towards the product that are being sold by the Group. In the annual report it was stated that JB-Hi-Fi understands the significance of disclosing the social, environment as well environment related matters to the company`s clients, suppliers and stockholders. Non- Controlling Interest The transaction regarding the alteration in the interest of ownership is treated with the non-controlling interest. It does not reflect as the outcome of loss of control with the owners of equity. The alteration of ownership interest is seen as the outcome of adjustments among the carrying amount regarding the interest in subsidiary. The non-controlling interest is recorded in the balance sheet under reserve. Auditors shall require to consider the need of thoroughly assessment of transaction that are related to transaction of non-controlling. (Bhargava Bhandari and Choudhury, 2018). Acquisition impairment JB Hi-Fi's income for the twelve months to June 30 rose to 13.3 per cent, though causal revenue that exposed out $22.4 million in prices rallied to the November, 2016 acquisition of white goods and chattels vendor The Good Guys along with a $15.8 million impairment on the New Zealand JB Hi-Fi stores was up to 36.5 per cent.The impairment is recorded in the balance sheet. (Christensen and Nikolaev, 2013).
5COMPANY ACCOUNTING Foreign Currency Transaction The company had foreign currency reserve amounted to $ 4.9 million in year 2017. This amount is the difference that is being occurred due to exchange during transaction of the Group`s those are foreign controlled entity. The amount present in the financial statements are presented in the AUD that is JB-Hi-Fi functional as well as presentation currency. Suggestions In the comprehensive investigation of the annual reports, it has been originate out that in some cases, the enterprises have not trailed the ethics or necessities of AASB appropriately. In case of evaluation of the assets along with other fiscal transactions, the corporations have trailed both historical cost as well as fair value methods while assessing the assets along with other monetary transactions and implements. The corporations need to trail the AASB standards appropriately. The company’s prerequisite to display the consolidated financial statements for minimum last three years for the contrast can be done appropriately. At the equivalent time, the corporations must public around their corporate social responsibility actions in their annual reports. Beside with that, the enterprise also prerequisite to reference their dependent liabilities in the fiscal reports.
6COMPANY ACCOUNTING Reference: Annualreports.com. (2019).JB Hi-Fi Limited - AnnualReports.com. [online] Available at: http://annualreports.com/Company/JB-Hi-Fi-Limited [Accessed 16 Jan. 2019]. Bhargava, S., Bhandari, A. and Choudhury, S., 2018. Role of homocysteine in cognitive impairement and Alzheimer’s disease.Indian Journal of Clinical Biochemistry, pp.1-5. Christensen, H.B. and Nikolaev, V.V., 2013. Does fair value accounting for non-financial assets pass the market test?.Review of Accounting Studies,18(3), pp.734-775. Hansen Henten, A. and Maria Windekilde, I., 2016. Transaction costs and the sharing economy.info,18(1), pp.1-15. Karadag, H., 2015. Financial management challenges in small and medium-sized enterprises: A strategic management approach.EMAJ: Emerging Markets Journal,5(1), pp.26-40. Laksana,J.,2015.CorporateGovernancedanKinerjaKeuangan(studikasuspada perusahaan perbankan yang terdaftar di bei periode 2008-2012).E-Jurnal Akuntansi, pp.269- 288. Spielberger, C.D., Gonzalez-Reigosa, F., Martinez-Urrutia, A., Natalicio, L.F. and Natalicio, D.S.,2017.Thestate-traitanxietyinventory.RevistaInteramericanade Psicologia/Interamerican Journal of Psychology,5(3 & 4).