Accounting Business Reporting for Decision Making

178 Accounting: Business Reporting for Decision Making

FIGURE 5.8 (continued)

JB Hi-Fi Ltd’s assets on

the balance sheet Note Disaggregation of asset class

Inventories 10 •    Finished goods (measured at the lower of the cost and net realisable

value)

If the entity is a manufacturer, other types of inventories on a balance

sheet include:

•   raw materials

•   work in progress.

Other 11 •  Prepayments

•   Other deposits

•   Other assets

Non-current assets

Plant and equipment 12 •    Leasehold improvements

•   Plant and equipment

•   Equipment under finance lease

JB Hi-Fi Ltd has plant and equipment and leasehold improvements only. It

has no land and buildings. It is common for property, plant and equipment

to be grouped together on the balance sheet.

Deferred tax assets 13 There are a variety of reasons contributing to temporary differences in

accounting profit and taxable income (e.g. tax losses).

Intangible assets 14 •  Goodwill

•   Brand names

•   Location premiums

•   Rights to profit share

Other types of intangible assets that may be on a balance

sheet include brand names, patents, management rights and licences.

Source: Information from JB Hi-Fi Ltd 2015, preliminary final report, pp. 76–80.

Cash and cash equivalents on a balance sheet comprise cash at bank, on hand, in transit and on

short-term deposit. Receivables represent amounts owed to the entity by other entities/individuals

(also referred to as debtors). The receivables for JB  Hi-Fi Ltd are divided into trade receivables

(amounts due from customers for the sale of goods or services, also known as accounts receiv-

able) and non-trade receivables. Non-trade receivables may include goods and services tax (GST)

receivables arising due to an entity having paid more GST during the reporting period than it has

collected. The entity is therefore entitled to receive the difference between GST paid and GST col-

lected from the government. The trade and other receivables note for JB Hi-Fi Ltd details informa-

tion concerning the receivables, such as the average credit period, the days that the receivables are

overdue and receivables that have been assessed as being impaired (i.e. doubtful). As JB Hi-Fi Ltd is

a retailer, its inventories consist of finished goods only. A manufacturing entity’s inventories would

include work-in-progress and raw materials. JB Hi-Fi Ltd also lists other assets on its balance sheet.

Its other assets include prepayments and deposits.

The property, plant and equipment asset class is typically a large asset class, as it comprises the

entity’s physical non-current assets. Included in this asset class for JB Hi-Fi Ltd are plant and equipment

and leasehold improvements. The company has no land or property. The company leases all of its prem-

ises. Specific items within the property, plant and equipment class are not disclosed. However, a smaller

entity may list various types of plant and equipment on the balance sheet. The plant and equipment note

for JB Hi-Fi Ltd details information concerning additions, disposals and depreciation charges for the

reporting period.