Corporate Finance Analysis: JB Hi-Fi's Asset Revaluation in 2017

This report provides a corporate finance analysis of JB Hi-Fi, focusing on the revaluation of its non-current assets, particularly in 2017. The analysis highlights the upward revaluation of intangible assets, specifically goodwill, due to business combinations, such as the acquisition of 'The Good Guys'. The report details the impact of this revaluation on JB Hi-Fi's balance sheet, the methods used for valuation, and the importance of revaluation in determining the fair value of the organization. It also includes a recommendation for JB Hi-Fi to continue the revaluation process, and provides relevant references and bibliography to support the findings. The report emphasizes the significance of understanding the current market value of assets for informed decision-making and accurate financial reporting. This analysis is designed to help students understand corporate finance principles through a real-world example.

Running head: CORPORATE FINANCE ANALYSIS
Corporate Finance Analysis
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CORPORATE FINANCE ANALYSIS
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Table of Contents
Providing an instance where the non-current assets of JB Hi-Fi were revalued upwards or
downwards:................................................................................................................................2
Recommendation:......................................................................................................................4
Reference and Bibliography:......................................................................................................5

CORPORATE FINANCE ANALYSIS
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Providing an instance where the non-current assets of JB Hi-Fi were revalued upwards
or downwards:
From the evaluation of the annual report, it could be identified that non-current assets
of JB Hi-Fi, as a relatively revalued upwards during the face value of 2017. The revaluation
process was relatively conducted on the intangible assets of the company, which was seen in
the financial report section. The other components of the non-current assets were relatively
not increasing in value, Other than the intangible assets of the organization, which increased
exponentially during the fiscal year of 2017. The above figure directly indicates the level of
increment in Goodwill that was generated during the fiscal year of 2017. This revaluation
process was relatively conducted, due to the addition in business combinations of the
organization. The valuation of goodwill relatively allows the organization to increase and
boost the non-current assets in there balance sheet which increases the total assets. Seay
(2014) stated that with the help of revaluation process the organization is able to understand
the current market value of their non-current, which in turn allows the management to make
adequate decisions.

CORPORATE FINANCE ANALYSIS
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The figure relatively indicates the overall increment in Goodwill valuation of JB Hi-Fi
that has been conducted during the fiscal year of 2017. The report highlights the overall
increment of boost in the goodwill conditions of JB Hi-Fi during the fiscal year. From the
evaluation, it could be understood that during the financial year of 2017 JB Hi-Fi is relatively
in code for you good well known as ‘The Good Guys’, which was valued at 566.9 million.
This relevant valuation directly boosted the Goodwill composition of JB Hi-Fi from a mere
49.5 million to 736.3 million in 2017. Yao, Percy and Hu (2015) argued that without
adequate revaluation process organizations are not able to understand their current market
value.

CORPORATE FINANCE ANALYSIS
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The above figure depicts the overall measurement or methods that have been used for
evaluating the Goodwill conditions of JB Hi-Fi. Moreover, the company directly utilizes
impairment testing, recognition and Measurement to determine the adequate and correct
value of the goodwill. This has a relatively help in adequately determining the current value
of the Goodwill which was represented in the annual report. The recognition and
Measurement method relatively utilizes the brand names premium locations and rights to
profit share to determine the current Goodwill conditions of the organization. Furthermore,
with the help of empowerment testing amortization of the intangible assets are relatively
conducted to determine their actual value.
Recommendation:
JB Hi-Fi should continue with the revaluation process, as it helps in determining the
fair value of the organization, which was seen during the fiscal year of 2017. This process
will eventually help the organization to project their current valuation to the investors, which
can be used for valuing their actual share price.

CORPORATE FINANCE ANALYSIS
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Reference and Bibliography:
Jbhifi.com.au. 2019. [online] Available at:
https://www.jbhifi.com.au/Documents/2017%20Annual%20Report.pdf [Accessed 8 Jan.
2019].
Seay, S.S., 2014. The economic impact of IFRS-a financial analysis perspective. Academy of
Accounting and Financial Studies Journal, 18(2), p.119.
Yao, D.F.T., Percy, M. and Hu, F., 2015. Fair value accounting for non-current assets and
audit fees: Evidence from Australian companies. Journal of Contemporary Accounting &
Economics, 11(1), pp.31-45.
Zakaria, A., Edwards, D.J., Holt, G.D. and Ramachandran, V., 2014. A Review of Property,
Plant and Equipment Asset Revaluation Decision Making in Indonesia. Mindanao Journal of
Science and Technology, 12.