Jardine Matheson Group (Part 1) Harvard Case Solution & Analysis

Jardine Matheson Group (Part 1) Case Solution

Issues

Access Jardine Matheson's most recent annual report on the company's website (www.jardine-matheson.com). Review the company's consolidated financial statements to evaluate whether the financial statements presented comply with the presentation requirements in IAS 1, Presentation of Financial Statements. Document your evaluation.

Facts

Jardine Matheson group was founded in the early 1830s. The root of the company was founded in the year 1832 in Canton by the S. W. Jardine and J. Matheson. The company was founded as the Jardine Matheson & Co. The company was founded after the East India was facing a decline in its trade and monopoly of trade in China.

The first consignment of the company was a shipment to England in 1834. The company is considered as one of the leading trade companies. The company has a diversified portfolio with the combination of the market-leading businesses. The company got 440,000 number of employees to run its operations in China and Southeast Asia. (Matheson, 2016)

The diversified portfolio of Jardine Matheson Group comprises of Jardine Pacific, Jardine Motors, Jardine Lloyd Thompson, Jardine Strategic, Hong Kong Land, Dairy Farm, Mandarin Oriental, Jardine Cycle & Carriage and Astra International. The companies included in the diversified portfolio of Jardine Matheson are considered as the leaders in the fields of the property, retailing, transport services, motor trading, hotels, insurance broking, engineering and construction.

The main objective of the company is to become the market leader in Asia Pacific. Jardine Matheson can achieve its objective with the help of its huge expertise and vast knowledge within the organization. Jardine Matheson has an extensive advantage due to its old long lasting relationship, which gives it an edge over its competitors.

Jardine Matheson was founded in Bermuda. The initial share listing of the Jardine Matheson Group was in London. Singapore and Bermuda became the second destination for the share listing of the company.

The major unit for managing the operations of the group is located in the Hong Kong, which provides management services to all of the companies operating in the diversified portfolio of Jardine Matheson.

Analysis

Jardine Matheson used the framework of the International Financial Reporting Standards (IFRSs) in order to present a number of financial statements including Consolidated Profit and Loss Account, Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Consolidated Statement of Changes in Equity, and Consolidated Cash Flow Statement.

IAS 1 can be applied to all the financial statements, which are made accordingly with the framework of the International Financial Reporting Standards. The financial statements of Jardine Matheson Group involve all the components of the financial statements that should be present in the financial statements with respect to the IAS 1 presentation of the financial statements.

The fair presentation of the financial statements according to the framework of the presentation of IAS 1 for the financial statements suggests that the statement should include unbiased demonstration of the financial performance, financial position and the cash flows.The components are well addressed however, there was some difference found in some of the terminologies used by the IAS 1 as compared to the financial statement of Jardine Matheson Group.

Consolidated Balance Sheet

The presentation of the Consolidated Balance Sheet should include normal classification of the financial position. The current and non-current assets as well as the liabilities should be defined separately. Jardine Matheson Group has very well classified categorized the assets and liabilities in either current or non-current forms in accordance with the requirements of the IAS 1.

Exhibit 3 comprises of Consolidated Balance Sheet of Jardine Matheson Group, through which it can be seen that it is different from the ordinary balance sheets of the companies, which use IFRS as the accounting principle. Assets and liabilities are considered as current assets/liabilities if the payment or the receiving of the asset or the liability would be settled with in the time duration of 12 months and should only be reported if it has been forecasted to be gathered in a time period of 12 months......................

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