Members:

Cabanes, Monique Marie

Caparida, Sam Gerald
Larita, Ehle Jayne
Yandoc, Desiree Mae

Audited financial Statements Link:

https://www.jollibee.com.ph/wp-content/uploads/JFC-Annual-Report-2017.pdf

I. General Information:

Company Name: Jollibee Foods Corporation

Auditor: Lorna D. Atun
Reporting Period: December 31,2017

II. Statement of Financial Position

1.) What are the elements related to the measurement of financial position? Briefly define each
element.

The elements directly related to the measurement of financial position of the entity
are assets, liabilities and equity. The first element is the assets, these are the things that
are resources owned by a company and which have future economic value that can be
measured. We have observed that JFC’s total assets for the year 2017 has increased by
17 million compared to the preceding year. Two of the accounts under asset that are very
noticeable are the cash accounts and the property, plant and equipment accounts. Cash
account increased by 4 million, as well as the property, plant and equipment.

The second element is the liabilities account, liabilities are the future sacrifices of
economic benefits that the entity is obliged to make to other entities as a result of past
transactions or other past events. The liabilities of the company increased by more than 8
million for the year ended. One of the accounts having the highest increase is the
non-current portion of long term debt which has the amount of more than 3 million, as well
as the trade payable and other current liabilities.

And last but not the least is the equity account, the equity is the net amount of funds
invested in a business by its owners, plus any retained earnings. The said account
increased by 17 million over the year. The account which had the greatest leap under
the account is the unappropriated retained earnings by more than 4 million.

2.) How are the line items under each element classified and/or arranged? Briefly explain.
 The line items under each element are classified by the financial comparison analysis.
The financial comparison analysis is the item-by-item comparison of two or more
comparable alternatives, processes, products, qualifications, sets of data, systems, or the
like. In accounting, for example, changes in a financial statement's items over several
accounting periods may be presented together to detect the emerging trends in the
company's operations and results. As what we can see from their financial position, they
presented the financial information by comparing the data of 2016 and for the year 2017.

3.) Under PAS 1, what are the minimum line items to be shown in the statement of financial
position? Are these line items shown in your company’s statement of financial position.

Under PAS 1, the minimum line items to be shown in the statement of financial
position is 18 and which includes; property, plant and equipment, investment property,
intangible assets, financial assets, investments accounted for using the equity method,
biological assets, inventories, trade and other receivables, cash and cash equivalents, the
total of assets, trade and other payables, provisions, financial liabilities, liabilities and
assets for current tax,deferred tax liabilities and deferred tax assets, liabilities included in
disposal groups, non-controlling interest presented within equity; and issued capital and
reserves attributable to owners of the parent.

Not all line items are present in the financial statement of the company, there are only
11 line items present and 7 line items missing. These 7 missing line items are the
following: investments accounted for using the equity method, biological assets, financial
liabilities, liabilities and assets for current tax, liabilities included in disposal groups and
issues capital and reserves attributable to owners of the parent.

4.) What is the form/presentation style used?

The form/presentation style used in there financial statements is the account form,
The account form statement of financial position is a financial statement format where the
assets are reported on the left side and the liabilities and equity are reported on the right
side. The account format is kind of a visual representation of the accounting equation.

III. Statement of Comprehensive Income

1.) What are the elements related to the measurements of financial performance in the
statement of comprehensive income? Briefly define each element.

The elements related to the measurement of the financial performance on the

statement of comprehensive income are the income and expenses. The first element is
income, income is money that an individual or business receives in exchange for
providing a good or service or through investing capital. As what the auditor of the JFC
presented we can see an evident increase in the income of the company form the year
2015 to the year 2017.And the second element is expenses, expenses is consists of
the economic costs a business incurs through its operations to earn revenue. And as well
as the expenses of the company it has increased a lot from the year of 2015 to the year
2017.

2.) What are the components of comprehensive income? Briefly define.

 Comprehensive income consists of all of the revenues, gains, expenses, and losses
that caused stockholders' equity to change during the accounting period. The first
component is the revenue, the Revenue is the amount of money that a company actually
receives during a specific period, including discounts and deductions for returned
merchandise. The second component would be gains, a gain is the increase in net profit
resulting from something other than the day to day earnings from recurrent operations,
and are not associated with investments or withdrawals. The third component would be
expenses, the expenses represent the cost of doing business where doing business is the
sum total of the activities directed towards making a profit, in addition to that the company
used the account expenses in general and administrative expenses and advertising
expenses for promotions. And last but not the least is the losses, a loss is a decrease in
net income that is outside the normal operations of the business. Losses can result from a
number of activities such as; sale of an asset for less than its carrying amount, the
write-down of assets, or a loss from lawsuits. In the company’s statement of
comprehensive income, the revenues and the expenses increase for the year 2015 to the
year of 2017, while the gains and losses were not presented in the company’s statement
of comprehensive income.

3.) How is the statement of comprehensive income presented? Did the company opt to present
two separate or one statement only?

The statement of comprehensive income is presented in the financial comparison

analysis, the financial comparison analysis is the item-by-item comparison of two or more
comparable alternatives, processes, products, qualifications, sets of data, systems, or the
like. In accounting, for example, changes in a financial statement's items over several
accounting periods may be presented together to detect the emerging trends in the
company's operations and results. And the company gave three separate years to be
compared from 2015 to 2017 financial data of the company.

4.) Under PAS 1, what are the minimum line items to be shown in the statement of
comprehensive income? Are these line items shown in your company’s statement of
comprehensive income?

The minimum line items to be shown are 4 and these are, profit or loss, total other
comprehensive income, comprehensive income over a period and an allocation of profit
or loss and comprehensive income for the period between non-controlling interest and
owners of the parent. And all these line items were presented by the company’s
statement of comprehensive income.

5.) What is the form/presentation style used?

The form/presentation style used in the Statement of comprehensive income of the

company we have chosen is the single-step income statement, The single-steps
statement of comprehensive income format uses a single subtotal for all revenue line
items and a single subtotal for all expense line items, with a net gain or loss
appearing at the bottom of the report. The said form/presentation is very evident on
how the Jollibee Foods Corporation presented their statement of comprehensive
income for the year of 2015 to the year 2017.
IV. Statement of Changes in Equity

1.) What are the important and necessary disclosures in the statement of changes in
equity?

The statement of changes in equity presents an entity’s profit or loss. Base in the
JFC 2017 annual Report, its statement of changes in equity as of December 2017 stated
that they had a total comprehensive income (loss) 42,581,979 which is bigger than the
December 2016 and 2015. The important and necessary disclosures in the statement of
changes in equity is the net income during the year 2017 which is higher. Base on
observation they had less expenses which give them the higher value than the past years.
It also included the capital issue and redemption during the period.

2.) How does the information in the statement of changes in equity relate to the other
financial statements?

Statement of changes in equity helps users of financial statement to identify the

factors that cause a change in the owners' equity over the accounting periods. Whereas
movement in shareholder reserves can be observed from the balance sheet, statement of
changes in equity discloses significant information about equity reserves that is not
presented separately elsewhere in the financial statements which may be useful in
understanding the nature of change in equity reserves.

V. Statement of Cash Flows

1.) What are the important and necessary disclosures in the statement of cash flows?

The Statement of Cash Flows is intended to provide necessary information on a

firm’s liquidity and solvency and its ability to change cash flows in future circumstances
and provide additional information for evaluating changes in assets, liabilities, and equity;
Improve the comparability of different firms’ operating performance by eliminating the
effects of different accounting methods; and indicate the amount, timing, and probability
of future cash flows. It also intends to disclose cash flows resulting from operating,
investing, and financing activities. And, it may also include a disclosure of non-cash
financing activities.

2. ) How does the information in the statement of changes in equity relate to the other
financial statements?

Net income from the income statement flows to the balance sheet and cash flow
statement.Depreciation is added back and Capital Expenditure is deduced on the cash
flow statement, which determines PP&E on the balance sheet.Financing activities mostly
affect the balance sheet and cash from finalizing, except for interest which is shown on
the income statement. The sum of the last period’s closing cash plus the recent period's
 cash from operations, investing, and financing is the closing cash balance on the balance
sheet. Thus, the financial statements are interrelated.

VI. Notes, comprising a summary of significant account policies and other

explanatory notes

1.) What kinds of information are presented in the notes?

Notes present information that help explain how a company arrived at its figures and
to explain any irregularities or perceived inconsistencies. It also provides additional
information that is not presented elsewhere in the financial statements but is relevant to
an understanding of any of them.

The Jollibee Group classifies all other liabilities as noncurrent. Deferred tax assets
and liabilities are classified as noncurrent assets and liabilities. For assets and liabilities
that are recognized in the consolidated financial statements on a recurring basis, the
Jollibee Group determines whether transfers have occurred between levels in the
hierarchy by reassessing categorization (based on the lowest-level input that is significant
to the fair value measurement as a whole) at the end of each reporting period. For the
purpose of fair value disclosures, the Jollibee Group has determined classes of assets
and liabilities based on the nature, characteristics and risks of the asset or liability and the
level of the fair value hierarchy.

Example of the Note for the Property, Plant and Equipment which the JFC invested.
Construction in progress account mainly pertains to costs incurred for ongoing
construction of properties, including soon-to-open stores. As at December 31, 2017 and
2016, no borrowing cost has been capitalized. Loss on disposals and retirements of
property, plant and equipment amounted to 174.5 million, P236.8 million and P136.7
million in 2017, 2016 and 2015, respectively (see Note 22). The cost of fully depreciated
property, plant and equipment still in use amounted to P12,935.4 million and P 9,929.9
million as at December 31, 2017 and 2016, respectively. The Jollibee Group performed
impairment assessments of its fixed assets considering that there are observable
indications that the assets’ values have significantly declined during the period as a result
of the passage of time. Consequently, allowance for impairment loss on office, store and
food processing equipment amounted to P442.7 million and P42.7 million as at December
31, 2017 and 2016, respectively. No property, plant and equipment as at December 31,
2017 and 2016 have been pledged as security and collateral.

The Notes thus report the details and additional information that are left out of the
main parts of reporting documents such as the balance sheet and income statement.

VII. Additional comments/observations on the disclosures and/or manner of

presentation:

The Jollibee Group is exposed to a variety of financial risk from its operating,
investing and financing activities. This is base in the observation of their 2017 annual
report. It is very visible that the JFC is one of the successful fast food chain. Yes of course
we can't say that a business is progressing when it is not taking a risk. And in addition to
that, the Jollibee Group has presented their Financial statement in the most clear and
concise way that we have observed that it would suffice the need of information of
students like us and of other business related personnel.