CHAPTER 5 Balance sheet 175- physical characteristics
- expected timing of future economic benefits
- purpose.
Liabilities and equity are classified according to their nature. The following factors could be used to
classify liabilities:
- liquidity
- level of security or guarantee
- expected timing of the future sacrifice
- source
- conditions attached to the liabilities.
Classification of equity items on the balance sheet can be based on their origin or source (that is, con-
tributions from owners or retained earnings), and/or the rights attached to the item.
Now that we have an appreciation of the elements of the balance sheet, we will consider the
different types of asset, liability and equity items (referred to as classes) that are likely to be found
on the balance sheet. Smaller entities often list all or some of their elements individually, without
aggregating them into classes for the purpose of balance sheet presentation. However, larger enti-
ties aggregate the assets by class for the purpose of presentation on the balance sheet, and provide
greater details on the various items within the asset, liability and equity classes in the notes to the
accounts.
We will explore the classes of assets, liabilities and equity on the balance sheet by referring to the
2015 consolidated balance sheet for JB Hi-Fi Ltd. Recall that the relevant notes to the balance sheet for
JB Hi-Fi Ltd are reproduced in the appendix to this text.
Assets
An extract of the asset section of the 2015 balance sheet for JB Hi-Fi Ltd is provided in figure 5.7.
The first thing you should notice is the segregation of assets into current and non-current assets, with
subtotals for current and non-current assets.
JB Hi-Fi Ltd
consolidated balance sheet as at 30 June 2015
ConsolidatedNotes2015
$’0002014
$’000Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets9
10
1449 131
81 480
478 871
7 41643 445
70 745
458 625
5 332
Total current assets 616 898 578 147Non-current assets
Plant and equipment
Deferred tax assets
Intangible assets
Other financial assets12
13
14176 208
17 363
84 541
3181 564
14 909
85 218
3
Total non-current assets 278 115 281 694
Total assets 895 013 859 841FIGURE 5.7 Extract of JB Hi-Fi Ltd 2015 balance sheet — asset sectionSource: JB Hi-Fi Ltd 2015, preliminary final report, p. 58.