Consolidated Financial Statement Analysis of JB Hi-Fi Limited

This report provides a detailed analysis of the financial consolidation of JB Hi-Fi, an Australian consumer goods retailer. It examines the company's group structure, including subsidiaries in Australia and New Zealand, and the role of the audit committee. The report discusses the preparation of consolidated financial statements in compliance with International Financial Reporting Standards (IFRS) and Australian Accounting Standards (AASB). It also touches on the company's funding strategies, corporate governance policies, sustainability initiatives, non-controlling interests, acquisition impairments, and foreign currency transactions. The analysis identifies areas where JB Hi-Fi could improve its adherence to AASB standards, particularly in asset valuation and disclosure of corporate social responsibility activities. This student-contributed assignment is available on Desklib, a platform offering a wide range of study resources, including past papers and solved assignments.

Running head: COMPANY ACCOUNTING
Company Accounting
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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 27th October 2016)
Wai Tang (On going member of Committee)
Mark Powell (On going member of committee since 13th March 2017)
Remuneration committee
Beth Laughton (on going member of Committee)
Gary Levin (Member of the Committee till 26th October 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
report in the annual report. The economic sustainability indicated about the business
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.

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].
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Hansen Henten, A. and Maria Windekilde, I., 2016. Transaction costs and the sharing
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Karadag, H., 2015. Financial management challenges in small and medium-sized enterprises:
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