Overview of JB HI FI
Question:
Prepare a comprehensive report directed to an Australian ASX Top 100 listed corporation detailing a critical analysis of the effectiveness of the corporation to meet the obligations of the conceptual framework of accounting. Consideration of the Conceptual Framework Objective, Recognition Criteria, Fundamental and Enhancing Guidelines is essential.
Accounting is mandatory process for every organization to maintain the financial activities and perform various activities. The [process of accounting is complex and that is why various accounting rules and regulations and standards have been set by the accounting boards to remove the complexity and make the accounting process simple so that the better decision could be made by the internal as well as external stakeholders of the company and at the same time, accounting also makes it simple for the company to achieve its goals (Zeff, van der Wel and Camfferman, 2016). The study of financial analysis and evaluation makes it easy for the company to perform all the activities in given time. While preparing this report, annual report of JB HI FI has been analyzed and it has been found that how the company is following the conceptual framework?
JB HI FI is an Australian company which is operating its business into the international market as well. This company is operating its business into consumer goods industry and it specializes in Blu-rays, CDs, DVDs and hardware, electronic and various home appliances. This company is one of the most rapidly growing and most successful companies. This company has been established in 1974 and the head office of the company is Keilor East (Home, 2017). This company has diversified its business into various industries and various countries to enhance the revenues and the turnover of the company. The share price of the comapny depict about the better performance and the position of the company.
Objectives of conceptual framework:
Conceptual framework is necessary for every organization to manage and maintain the financial performance of the company as well as it also assist the company to reveal entire financial related activities. Conceptual framework takes the concern of income, liabilities, assets and expenses etc. Through analyzing over the financial statement of the company, it has been evaluated that the conceptual framework has been followed by the company properly (Garrett, Hoitash and Prawitt, 2014). The reporting and recording of income, liabilities, assets and expenses etc has been done according to the GAAP rules and the coordination among all the standards and the financial rules of the company.
Conceptual framework is accompanied with numerous rules and the regulations that focus over the transparency and simplicity of the recording of financial transaction and it also replicates the various financial factors and the basic figures of the company properly. While preparing the financial statement of the company, GAAP and IFRS rules have been strictly followed by the company (Elad, 2016). The IFRS rules have been prepared in such a manner that the financial statement could be understand through international clients easily. The annual report and the financial statement of the company depict that the financial reporting process of the company is quite competitive and entire accounting standards have been followed by the company to make it simple for the stakeholders to make quick decisions (Annual report, 2017).
Conceptual Framework of Accounting
The study over the annual report of JB HI FI depicts that the accounting concept has also been followed by the company to report all the financial activities into the financial statement in a proper way. The understanding and the proper information has been provided by the company through following the IFRS rules. The international financial reporting rules had helped the company to administer the company in managing the better result. The harmonization of GAAP and IFRS rules has also been followed by the company to manage the performance in a better way. The annual report of other competitive companies has also been followed to identify the objective of financial reporting. This company has used the IAS 136 to record all the financial activities and the liabilities and assets of the company. Further, IAS 2 has been followed to manage the inventory of the company.
Further, it has also been found that the relevant factors and the information have been disclosed by the company properly through using the accounting rules. Moreover, the various financial rules and the performance have helped the company in managing every related factor. This company has followed the proper framework of income statement, balance sheet and cash flow statement to manage the information in a systemic manner. Further, the detailed notes and the narration of the financial statement have also been provided by the company to manage the performance and administration of the company (Morningstar, 2017). The IAS 7 rules have been followed by the company to manage the cash flow statement and it has been described in the annual report that the inventory has been recorded through following the IAs 2 standards.
Recognition of all the financial activities such as assets, liabilities, income and expenses are required and must be done in a proper manner by the management and chief financial officer of the comapny so that the goals and objectives could be met and it also assist the related parties to make a better decision about the position of the company (Chand, Patel and White, 2015). The annual report of the comapny expresses that the double entry accounting system has been followed by the comapny to manage the position and the performance of the company. The financial figures have been recorded and reported by the JB HI FI through following the concepts of IFRS and GAAP. This company has used the IAS 136 to record all the financial activities and the liabilities and assets of the company. Further, IAS 2 has been followed to manage the inventory of the company. The method of first in first out has been used by the company to record the inventory and manage the operations of the company in proper way.
This company has followed the proper framework of income statement, balance sheet and cash flow statement to manage the information in a systemic manner. Further, the detailed notes and the narration of the financial statement have also been provided by the company to manage the performance and administration of the company (Abeysekera, 2013). The IAS 7 rules have been followed by the company to manage the cash flow statement and it has been described in the annual report that the inventory has been recorded through following the IAs 2 standards. The impairment rules have been managed by the company through recording the reserves in a perfect manner.
Analysis of JB HI FI’s Financial Performance
Through study over the annual report of the comapny and analyzing the concept of accounting, it has been evaluated that the entire transaction has been recorded by the comapny on the basis of accounting standards and regulations. The transparency has been followed by the comapny while preparing the statements and recording the financial activities in the financial statements. Further, the detailed notes and the narration of the financial statement have also been provided by the company to manage the performance and administration of the company (Cayanan, 2016).
Moreover, the various financial rules and the performance have helped the company in managing the faithful representation. This company has followed the proper framework of income statement, balance sheet and cash flow statement to manage the information in a systemic manner.
Lastly, the fundamental qualities of the comapny has been analyzed and it has been found that due to accounting standards and regulations, the fundamental qualities of the company has been better.
Relevancy:
The relevancy factors over the annual report of JB HI FI has been analyzed and it has been found that the company has followed the IFRS rules to manage the activities of the company and due to it, relevancy of the financial activities have been enhanced (Dinnie, 2015).
Timely:
Further, it has also been found that the entire activities have been recorded and followed by the company properly. The particular time has been analyzed and the entire activities have been performed by the company accordingly. This has made it easy for the company to record all the activities.
Comparable:
Further, the comparability factors over the annual report of JB HI FI have been analyzed and it has been found that the company has followed the IFRS rules to manage and record the financial activities and transaction (Draft, 2015). Further, the better accounting policies made it more comparable than other organizations in the industry.
Verifiable:
The annual report of the company depict entire financial activities have been verified by the auditor of the company and for more verification, accounting notes have been given in the annual report of the company.
Faithfulness:
Lastly, the faithfulness of the comapny has also been analyzed and it has been found that the performance and the position of the company have been recorded through the rules of accounting and thus it is quite faithful (Elad, 2016).
Conclusion:
To conclude, the financial activities and the figures have been reported and recorded by the management of the comapny in the annual report of JB HI FI to manage and administer the proper performance and to reach over the gaols and the objectives of the comapny. The position of the comapny is quite better and the annual report s revealing the entire relevant factor in a proper way.
References:
Abeysekera, I., 2013. A template for integrated reporting. Journal of Intellectual Capital, 14(2), pp.227-245.
Annual report. 2017. JB HI FI. Available from https://www.jbhifi.com.au/Documents/2016%20JB%20Hi-Fi%20Annual%20Report_ASX.pdf [accessed on 14th Dec 2017].
Cayanan, A.S., 2016. An assessment of the financial reporting practices of listed Philippine banks in 2003. Philippine Management Review, 11(1).
Chand, P., Patel, A. and White, M., 2015.Adopting international financial reporting standards for small and medium?sized enterprises. Australian Accounting Review, 25(2), pp.139-154.
Dinnie, K., 2015. Nation branding: Concepts, issues, practice. Routledge.
Draft, I.E., 2015.Conceptual Framework for Financial Reporting. 2015-05-01)[2015-07-20]. https://kjs. mof. gov.cn/zhengwuxinxi/gongzuotongzhi/201506 P.
Elad, C., 2016. International Classification of Financial Reporting, Christopher W. Nobes.Routledge, Abington, UK (2014),(160 pages,£ 95), ISBN: 0415736935.
Garrett, J., Hoitash, R. and Prawitt, D.F., 2014. Trust and financial reporting quality. Journal of Accounting Research, 52(5), pp.1087-1125.
Home. 2017. JB HI FI. Available from https://www.jbhifi.com.au/ [accessed on 14th Dec 2017].
Morningstar. 2017. JB HI FI. Available from https://financials.morningstar.com/ratios/r.html?t=JBH [accessed on 14th Dec 2017].
Zeff, S.A., van der Wel, F. and Camfferman, C., 2016. Company financial reporting: A historical and comparative study of the Dutch regulatory process. Routledge
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