The Overall Current Liabilities of JB Hi Fi Limited | Annual Report
Added on 2020-04-01
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ACCOUNTING
Accounting Part - AAnswer – 1As per the annual report, the overall current liabilities of JB Hi-Fi Limited got enhanced in the year 2013 as compared to the year 2012. The entire current liabilities enhanced by $2.9 million. Going by the annual report, it is witnessed that the current assets of the company stand at $439.38 in 2012 as compared to the current liabilities that stands at $442.38 million (JB-Hifi, 2013).As a matter of fact, the current liabilities pertains to the amount that is payable to the creditors in a span of 1 year. Current liabilities are classified as those liabilities that need to be dischargedin a span of 12 months. This indicates that the payments need to be done in the near future (Albrecht et. al, 2011). The company should have the adequate amount of current assets so that it can cover the current liabilities with ease and flexibility (JB-Hifi, 2013). In the case of JB-HiFi, the liabilities that are contained in the balance consist of Accounts payables, Income tax payables, Accrued Payroll and other current liabilities of miscellaneous nature. This consists of the liability that does not appear in any of the classes consisting above.Answer – 2The major liabilities include those liabilities that pertain to the short-term, as well as long-term. Such have a major bearing on the balance sheet because they pertain to the long run. The major liabilities consist of accounts payables, debts that are convertible in nature and the taxes-debit that are deferred in nature (Davies & Crawford, 2012).Answer – 3A provision pertains to the amount that a firm keeps aside for any liability that is expected in thenear future or for any asset that declines in the value. The amount can be specific in nature or may be unknown (William, 2010). In the case of JB Hi-Fi, the provision consists of debt that are non-convertible in nature and taxes that are of deferred nature (JB-Hifi, 2013).When it comes to the non-convertible debt it pertains to the bonds that are unsecured and cannotbe converted into stock or equity. Such debts are popularly called as non-convertible debenturesthat are long-term liabilities. The tax liabilities that are deferred can be said to be the amount that generates from the difference that is temporary in nature, the carrying value of the taxes and the firm’s accounting, the income tax that is expected and the sanctioned amount along with the estimated tax that needs to be paid in the current year of operations (Spiceland et. al, 2011).2
Accounting As per IAS37/AASB137, provisions consist of a difference as compared to other liabilities as they have uncertainty when it comes to the point of timing and the amount that is expected for the expenditure of a future course of time for the settlement purpose. Hence, going by the current state, it can be commented that taxes that are deferred (debit) non convertible debts are provision for liabilities. As per the balance sheet of JB-HiFi, the payroll that is accrued in natureprojects the benefits of the employees, wage, bonus, salary, and commission. The accrued payroll enhanced from $27.8 million in 2012 to $35.11 million in 2013 (JB-Hifi, 2013).Answer – 4As per the cash flow statement of JB HiFi, the net inflow of $121.1 million. As per the previousyear, the new outflow comprises of $27.66 million. The increment projects that the company has enhanced the operations (JB-Hifi, 2013). Answer - 5Floating securities have secured all the non-current liabilities or borrowings.Answer – 6Non-current borrowings are to be repaid in a span of two years amounting to $9.42 million andthe remaining $23.35 needs to be repaid in a time frame of 2 to 5 years (JB-Hifi, 2013). Answer – 7In the balance sheet of JB Hifi, there appear two non current provisions that are the provision for lease, deferred taxes and the charges along with the risks.3
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