Accounting Business Reporting for Decision Making

172 Accounting: Business Reporting for Decision Making

Entities are required to disclose the subsidiaries that they consolidate into their group accounts. If

we use JB Hi-Fi Ltd as an illustration, JB Hi-Fi Ltd Notes to the financial statements identify that the

parent entity (JB Hi-Fi Ltd) has control over seven subsidiaries: JB Hi-Fi Group Pty Ltd, JB Hi-Fi

(A) Pty Ltd, Clive Anthonys Pty Ltd, Rocket Replacements Pty Ltd, Network Neighborhood Pty

Ltd (the name of this business has subsequently changed to JB Hi-Fi Education Solutions), JB Hi-Fi

Group (NZ) Limited and JB Hi-Fi NZ Limited. As at the end of June 2015, JB Hi-Fi Ltd owned

100 per cent of the shares in each of these entities. The group structure is depicted in figure 5.5.

The parent entity, JB Hi-Fi Ltd, is represented by the oval shape. This entity owns 100 per cent of

the shares in the subsidiary entities, represented by the rectangular shapes. The parent entity and the

subsidiaries comprise the group. Financial statements are prepared for the group as a single economic

entity. The parent entity financial statements reflect the performance and position of JB Hi-Fi Ltd

only, whereas the consolidated financial statements reflect the performance and position for the

parent and subsidiary entities.

JB Hi-Fi Limited

Controls

JB Hi-Fi

(A) Pty Ltd

Clive

Anthonys

Pty Ltd

Rocket

Replacements

Pty Ltd

JB Hi-Fi

NZ Limited

JB Hi-Fi

Group (NZ)

Limited

Network

Neighborhood

Pty Ltd

JB Hi-Fi

Group Pty Ltd

FIGURE 5.5 JB Hi-Fi Ltd group structure

The group balance sheet for JB Hi-Fi Ltd is illustrated in figure 5.6. It is presented in a narrative

format and reports the group’s assets, liabilities and equity as at 30 June 2015. Note that the assets equal

the liabilities plus equity.

JB Hi-Fi Ltd

consolidated balance sheet as at 30 June 2015

Consolidated

Notes

2015

$’000

2014

$’000

Current assets

Cash and cash equivalents

Trade and other receivables

Inventories

Other current assets

9

10

14

49 131

81 480

478 871

7 416

43 445

70 745

458 625

5 332

Total current assets 616 898 578 147

Non-current assets

Plant and equipment

Deferred tax assets

Intangible assets

Other financial assets

12

13

14

176 208

17 363

84 541

3

181 564

14 909

85 218

3

Total non-current assets 278 115 281 694

Total assets 895 013 859 841