Book value per share of Japan Food Holdings is its total shareholders’ equity divided by its total number of shares outstanding, whereby shareholders’ equity is obtained by using total asset less total liabilities.
(Total Assets-Total Liabilities )/(Total Outstanding Shares)=Book value per share
(38199000-7624000 )/174006000=0.18 SGD per share (Japan Foods Holding Ltd, 2015)(Appendix A)
Market value per share as of 31 march 2015 = $0.49 Singapore dollars. (Yahoo! Finance, 2015) (Earl K.Stice, 2015) Inaccurate estimation of depreciating assets
One major component of assets in JFH’s balance sheet is Property, Plants and Equipment (PPE). JFH uses a straight-line method for the depreciation of its PPE, and the depreciable amount is allocated equally …show more content…
FRS 38:12 states that an asset is identifiable if it is separable from the entity. (Accounting Standards Council Singapore, 2015) In JFH’s case, customer loyalty is separable as it is possible to derive it from the number of membership card sales.
Secondly, JFH has control over customer loyalty as it has the power to obtain and derive benefits from it, which are restricted to the company. For instance, JFH has accumulated customer details and information through membership card registrations that other competitors are unable to access.
Lastly, an asset is recognised only if it is probable that future economic benefits specifically associated therewith will flow to the reporting entity, and the cost of the asset can be measured reliably. In the case of Ajisen Ramen, customers in the membership programme can receive updates on discounts and promotions by visiting Ajisen’s Facebook page. This helps to boost sales. By creating customer loyalty from the sales of membership cards, JFH has the ability to boost future economic benefits, as customers are more willing to patronize JFH’s …show more content…
(Japan Foods Holding Ltd, 2015)(Appendix C) According to Business Insider Singapore, customers of Ajisen Ramen can attain a membership card by paying $10. (Ang, 2014) This entitles them to dine at a discount at the food outlets under JFH. Membership cards help to retain customer loyalty as well as to encourage customers to patronise the store again, which may potentially increase JFH’s sales. This shows that customer loyalty is deemed to be able to provide future economic benefits for the
(Total Assets-Total Liabilities )/(Total Outstanding Shares)=Book value per share
(38199000-7624000 )/174006000=0.18 SGD per share (Japan Foods Holding Ltd, 2015)(Appendix A)
Market value per share as of 31 march 2015 = $0.49 Singapore dollars. (Yahoo! Finance, 2015) (Earl K.Stice, 2015) Inaccurate estimation of depreciating assets
One major component of assets in JFH’s balance sheet is Property, Plants and Equipment (PPE). JFH uses a straight-line method for the depreciation of its PPE, and the depreciable amount is allocated equally …show more content…
FRS 38:12 states that an asset is identifiable if it is separable from the entity. (Accounting Standards Council Singapore, 2015) In JFH’s case, customer loyalty is separable as it is possible to derive it from the number of membership card sales.
Secondly, JFH has control over customer loyalty as it has the power to obtain and derive benefits from it, which are restricted to the company. For instance, JFH has accumulated customer details and information through membership card registrations that other competitors are unable to access.
Lastly, an asset is recognised only if it is probable that future economic benefits specifically associated therewith will flow to the reporting entity, and the cost of the asset can be measured reliably. In the case of Ajisen Ramen, customers in the membership programme can receive updates on discounts and promotions by visiting Ajisen’s Facebook page. This helps to boost sales. By creating customer loyalty from the sales of membership cards, JFH has the ability to boost future economic benefits, as customers are more willing to patronize JFH’s …show more content…
(Japan Foods Holding Ltd, 2015)(Appendix C) According to Business Insider Singapore, customers of Ajisen Ramen can attain a membership card by paying $10. (Ang, 2014) This entitles them to dine at a discount at the food outlets under JFH. Membership cards help to retain customer loyalty as well as to encourage customers to patronise the store again, which may potentially increase JFH’s sales. This shows that customer loyalty is deemed to be able to provide future economic benefits for the