Accounting Homework: JB Hi-Fi Liabilities and Cash Flow Analysis

This assignment analyzes the current liabilities of JB Hi-Fi, examining the changes from FY2016 to FY2017. It breaks down the components of current liabilities, including trade payables, deferred revenue, provisions, and other current liabilities. The analysis delves into specific figures, such as the increase in employee benefits provisions and the company's borrowing activities, highlighting the impact of financing cash flow. Furthermore, the assignment explores the nature of the company's borrowings, including the unsecured status of long-term debts and the debt maturity profile. It also addresses the presence of non-current provisions and their implications. References to relevant accounting standards and the company's annual report are included to support the analysis. This assignment provides a comprehensive overview of JB Hi-Fi's financial position and the management of its liabilities.

ACCOUNTING
STUDENT ID:
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PART A
Question 1
The relevant extract of current liabilities for the company is shown below (JB Hi-Fi, 2017).
It is apparent that over the year, there has been an increase in the current liabilities from $
446.8 million at the end of FY2016 to $ 885.8 million at the end of FY2017. Further, the
increase in current liabilities is by $ 439 million. The classification of current liabilities is
given below (JB Hi-Fi, 2017).
 Trade and other payables
 Deferred Revenue
 Provisions
 Other current liabilities
 Current tax liabilities
Question 2
The relevant extract regarding liabilities of the company at the end of FY2017 is shown
below (JB Hi-Fi, 2017).

The key liabilities for the company at the end of FY2017 are as follows (JB Hi-Fi, 2017).
1) Trade and other payables - $ 647.8 million
2) Borrowings = $ 558.8 million
3) Deferred revenue (current) = $ 141. 8 million
4) Deferred revenue (non-current) = $ 99.6 million
5) Provisions - $ 75.4 million
Question 3
The breakup of current provisions is indicated below (JB Hi-Fi, 2017).

Provisions refer to those amounts which are expected to be paid on the events that have
happened in the past. The current provisions are those which are expected to be payable
within one year i.e. in FY2018. The definition of these provisions tends to comply with the
underlying understanding highlighted in AASB 137 (Deegan, 2014). The employee benefits
related current provisions have increased by $26.5 million at the end of FY2017 as compared
to the corresponding figure at the end of FY2016 (JB Hi-Fi, 2017).
Question 4
The relevant extract of financing cash flow for the company is indicated below (JB Hi-Fi,
2017).
It is apparent that the company has borrowed additional $ 450 million in FY2017 and has not
made any repayments. This is in sharp contrast with FY2016 when the company made
repayment of $ 30 million and did not raise additional interest bearing loan (JB Hi-Fi, 2017).
Question 5
100% of the long term or non-current borrowings for the company are unsecured as is
apparent from the following extract from the relevant note in the notes to account in the
company’s annual financial report (JB Hi-Fi, 2017).

Question 6
The relevant extract for the debt maturity profile of the company as on June 30, 2017 is
indicated below(JB Hi-Fi, 2017).
Loans payable within 2 years = 8.3 + 8.3 + 206.2 = $ 222.8 million
Loan payable between 2 and 5 years = $ 369.5 million
Loan payable after 5 years = $ 0
Question 7
Yes, there are non-current provisions as on June 30, 2017 and are indicated from the extract
below (JB Hi-Fi, 2017).
The non-current provisions amount to $ 11.8 million as on June 30, 2017. These tend to
represent the liabilities that are expected to be settled in the long term (FY2019 onwards) and
arise on account of past actions (Deegan, 2014).

References
Deegan, C. (2014). Financial Accounting Theory, 4th edn. Sydney: McGraw-Hill
JB Hi-Fi (2017) Annual Report 2017, [online] Available at
https://www.jbhifi.com.au/Documents/2017%20Annual%20Report.pdf [Accessed
September 28, 2018]