Case 3-1Jardine Matheson Group
Prepared by
For professor C. E. ReeseIn partial fulfillment of the requirements for
ACC 508 International Accounting
School of Business/Graduate StudiesSt. Thomas University
Miami Gardens, Florida
Term FL1/Fall,2019September 08th 2019
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Table of contentsIssues…………………………………………………………………………………………………….3
Facts……………………………………………………………………………………………………..4
Analysis………………………………………………………………………………………………….5
Conclusion……………………………………………………………………………………………….7
Reference………………………………………………………………………………………………..8
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Issues
1.Whether the financial statements presented comply with the presentation
requirements in IAS 1?
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Facts
Jardine Matheson Group is a market-leading business. The company is an
Asian-based business and have the subsidiary company such as Jardine Pacific,
Jardine Motors Group, Hong Kong Land, Dairy Farm, Mandarin Oriental, Cycle&
Carriage, and Jardine Lloyd Thompson. Company business involves Engineering,
construction, transport service, motor trading, property, retailing, restaurants, hotels,
and insurance broking. With the support of Jardine Matheson’s extensive knowledge
of doing business and relationship with other business, Jardine Matheson Group aims
to produce sustained growth in shareholder value and attract more investment.
Through a balance of cash-producing activities, the company also invested in
the new business. Jardine Matheson Group Incorporated in Bermuda and company’s
share listing in London. The secondary share listing in Singapore and Bermuda. The
company provides management services and making management, provide financial
legal, human resources and treasury support service.
Jardine Matheson uses International Financial standards to report company
financial statement for many years. The purpose of this case is to review the company
latest annual report and look through the consolidated financial statement and
evaluate whether the financial statement follows IAS 1, presentation of financial
statement.
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Analysis
According to company’s latest annual report, Jardine Matheson Group
underlying earnings per share up 13%, Full year dividend increase 7%, company have
a strong trading performance compare with most business (Jardines 2017). As a
market-leading business, follow the accounting standards and prepare correct
financial statement is necessary. The company uses International Financial Reporting
Standards in preparing its financial statements for many years.
IFRS is an international based standard; it is very convenient for the company
to use this standard to make the financial statement especially doing business around
the world. What is more, IFRS designed for a profit-oriented entity (KPMG P4).
Jardine Matheson Group is a market-leading business and has business around the
world, so it is an excellent choice for the company to use IFRS standards.
IAS 1 Presentation of the financial statement issued in September 2007 (IFRS
2007). According to IFRS website, “IAS 1, presentation of Financial statement set out
the overall requirement and provide a guide for structure and require an entity to
prepare a complete financial report at least annually (IFRS 2007). To find whether the
company complies with IAS 1 it is important to determine a consolidated financial
statement based on company annual report.
First, IAS required an entity to provide a financial statement at the end of each
period. Jardine Matheson Group follows this require and prepare financial statement
both annually and half-yearly. The latest annual report is 2017 annual report. This
annual report end at calendar year-end period, which is December 31, 2017. So, it
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meets IAS first requirement.
Second, IAS 1 required the company to provide the statement of profit and loss
and other comprehensive income for the period (IFRS 2007). Jardine Matheson Group
provides an apparent consolidated profit and loss account. Jardine Matheson Group is
a market-leading entity. According to the company 2017 annual report, Jardine
Matheson Group report revenue $31,556 million and net operating costs $(28,593)
million. The company also reported operating profit $2,963 million under the
underlying business performance. Company annual reports also show that the total
profit after tax was $3,359 million, and $4,850 no trading item (Jardins 2018). The
company also use 2016 Consolidated Profit and Loss Account to compare with 2017;
the company makes much profit in the year 2017 it is good for the investor to invest.
The third requirement is IAS required entity to provide a statement of change in
equity for the period (IFRS 2007). From company Consolidated Statement of Change
in Equity, Jardine company equity increases $8,015 million. Company report change
such as Total comprehensive income, the dividend paid by the company, Scrip issued
in lieu of dividends and Employee share option schemes (Jardines 2017).On the
Consolidated Statements of Change in equity for the period, both company revenue
reverse increase and Attributable to shareholders of the company increase and help the
company to get more equity.
Fourth, under IAS 1, to prepare a financial statement, the company need to
provide a statement of cash flow for the period. Jardine Matheson Group follow this
require and have Consolidated Cash Flow Statement. On the company financial
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statement, it compares 2016 and 2017 cash flows. For the year-end 2017 operating
profit was $7,732 million.
Next requirement is providing notes, a summary of significant accounting
policies and other explanatory information. (IFRS). According to company annual
report, Jardine Matheson Group provide Notes to the financial statement, Financial
risk management, Critical Accounting Estimates and Judgements, and other important
notes,
which include principle accounting policy.
Last, IAS 1 required company provide a statement of financial position at the
beginning period. According to company use, 2017 year-end financial record compare
with January record, this is also complying with the presentation requirements in IAS
1.
In the auditor’s opinion, after the auditor pointed out that the data that the
company use to prepare financial statement is accurate and based on available
evidence. In the company 2017 annual report, company use the accrual basis of
accounting and prepared financial assuming company as going concern and will
continue operating for the foreseeable future.
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ConclusionAfter reviewing the company’s consolidated financial statement, it can say that
Jardine Matheson Group is a marketing-leading business. From the company latest
annual report, the company followed IFRS standards and presented comply with IAS
1 Presentation of financial statements; the company prepares all necessary
consolidated financial statement that IAS required and have detail notes.
According to company annual report, Jardine Matheson Group strategy is to
take a strategic stake into the multinational business. From company 2017 annual
report, the company makes profit world wild. An accurate financial report can provide
manager detail information about company financial situation and help company
investors to invest.
In conclusion, Jardine Matheson Group doing will in its business and follow the
financial statement report rules and provide all required statements to company
investors and assist users of financial statement to get the information they need. A
successful company needs to provide an accurate financial report for both manager
and investor.
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ReferenceDeloitte. (2017). IAS Plus IAS 1presentation of Financial statement. Retrieved from https://www.iasplus.com/en/standards/ias/ias16
IFRS (2007).IAS 1 Retrieved from https://www.ifrs.org/issued-standards/list-of- standards/ias-1-presentation-of-financial-statements/
KPMG LLP (2017). IFRS compared to U.S. GAAP. Retrieved from:https://assets.kpmg.com/content/dam/kpmg/xx/pdf/2017/12/ifrs-us-gaap-2017.pdf
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