Assessment details for Semester and Final Examination
As per the financial report of JB Hi- Fi Limited of the year 2013, the following are answered:
The total current liabilities have increased from $439,481,000 in the year 2012 to $442,379,000.
The liabilities have increased by $2,898,000.
The classes of liabilities recorded under the classification “Current Liabilities” are:
- Trade and other payables
- Other financial liabilities
- Current tax liabilities
- Provisions
- Other current liabilities
The major liabilities of JB Hi-Fi Limited at the end of the financial year:
- Bank loans
- Lease provisions
- Interest rate swap
- Employee benefits
The items are included under the heading ‘Provisions’ in the ‘Current Liabilities’ section of the statement of financial position are:
- Employee benefits
- Lease provision
The nature of the above are:
- Employee benefits: Short term employment cost
- Lease provision: Short term debt
As per the IAS 37 i.e. the “Provisions, Contingent Liabilities and Contingent Assets”, the liabilities or the provisions having an uncertain time and amount will be recorded accordingly. They will have to be measured with the estimates that are the best and also after taking into account the risks and other measures.
The employee benefits have increased by $(35,111,000-27,802,000) i.e. by $7309, 000 from 2012 to 2013 respectively.
The cash that has been raised is by the bank loan i.e. $124,331,000
The loans that has been repaid is $149,775, 000
The loans have decreased as the repayment of the higher amount has been done. Thus, the total liabilities have decreased by $25,444,000
In the year 2013, no non-current liabilities are secured.
The non-current borrowings are due to be repaid are as under:
- Within 2 years: $7102,000
- Between2 years and 5 years: $132,102,000
- Beyond5 years: Nil
The non-current provisions are as under:
- Employee benefits : These represents the benefits from the company that are provided to the employees and include the assistance towards the medical plans, relocation or other accounts of flexible spending and plans related to the retirement plans and other benefits towards the employees. It also includes the long term plans of insurance, medical and legal assistance plans.
- Lease Provision: There is a requirement of creating agreements of lease and it represents a contract that has a binding upon the landlords and the tenants. It also includes the particular responsibilities of the involved parties that may or may not take into account the subtenants. The agreements of rents have a protection towards the tenant and landlord and thus there is a probability of the confusions or the disputes of legal nature during the term of lease. The provisions are created in a standard way for the creation of all the major agreements of leases and the same varies from one landlord to other.
- Other Provisions: There are other provisions that must be accounted in the accounts and the annual reports of a company. It represents that the provision is an account that keeps a record and documentation of a current liability of a company. The documentation of the accountability in the balance sheet of an organization is harmonized to an apt and suitable account of expenses in the statement of income of an organization.
As per the financial report of Country Road Limited of the year 2013, the following are answered:
The company has an income tax expense i.e. (14,715,000’S) and it represents the current and other deferred tax liabilities.
In a partnership company, the income tax expenses are not shown in the income statement of the partnership. Every individual partner gets their share of income calculated as per the net income from the income statement and tax on the same has to be expensed individually. The share of profit on an individual basis is carried on to their income tax returns and tax as per the given slab of the income tax provisions of the country.
The retained earnings in the case of the Country Road Limited that are increased through the profits earned by the company gets appropriated in the form of dividend to the shareholders of the company to increase the trust and faith of the investors and the shareholders.
In case of the partnership, the retained earnings in the form of profit appropriation account is distributed among the partners of the partnership firm.
Therefore, while in a partnership firm, there is no dividend distribution and profits are distributed as per the ratio of partners share, in the company, the profits are distributed through dividends.
The differences occur as the company in order to gain trust from their investors need to pay them an extra amount that is calculated as per their share of investment. While in case of partnership, the partners only have to share the whole amount of profits.
The issued capital is a part of the share capital and the amount is shown in the Balance Sheet. It comprise of the funds of the investors and shares issued to the general public and hence shown in a separate manner.
In the case of partnership, the capital comprises of the partners own funds invested and is not for the general public and thus is not presented as a separate head of the accounts.
The cash flow statements are prepared for capturing the inflows and outflows of the transactions of the company and in case of a typical partnership firm; the firm has the obligation of doing the same.
As per the standards of the AASB 116, there has been a requirement for the preparation of the cash flows and thus, the partnership must also take steps in measuring the inflow and outflow of the cash of the firm.
Therefore, the company and the partnership companies must take steps in including the cash flow statements in their books of accounts.
References
Azizul Islam, M. and Jain, A., 2013. Workplace human rights reporting: a study of Australian garment and retail companies. Australian Accounting Review, 23(2), pp.102-116.
EMI, M.P., Chase, S., Vodica, D. and Harlow, T., 2013. Australian Recording Industry Association. The Holly Valance Handbook-Everything you need to know about Holly Valance, p.10.
FAREWELL, A. and DEMERGER, A.A.O.O., 2013. BIG WIND FARM, BIG SOLAR PROjECTS AND quITE A REM REPORT PROTEST TOO.
Maister, D.H., 2012. Managing the professional service firm. Simon and Schuster.
Meyskens, M. and Carsrud, A.L., 2013. Nascent green-technology ventures: a study assessing the role of partnership diversity in firm success. Small Business Economics, 40(3), pp.739-759.
Tallentire, A.A.P., The listed companies ASA is monitoring in 2013.
Vanichchinchai, A., 2012. The relationship between employee involvement, partnership management and supply performance: Findings from a developing country. International Journal of Productivity and Performance Management, 61(2), pp.157-172.
Wang, K.J. and Lestari, Y.D., 2013. Firm competencies on market entry success: Evidence from a high-tech industry in an emerging market. Journal of Business Research, 66(12), pp.2444-2450.
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