1.

Introduction

Next a retail chain was launched in the UK in February 1982; the store consisted for a wide variety of clothes for both men and women. Over the years NEXT has extensively expanded its scale of operations in UK as well as globally. Currently there are about 536 stores of Next in the UK. The corporation has over 200 stores in 30 countries globally. To capture the wide network of customers that the group could reach through the web, Online shopping facility was launched in 1999 with express delivery. The group has extensively focused on providing customer satisfaction and constantly widening its customer base. The company also promises its shareholders extensive long term growth and increased earnings of shares. With group operations in growth countries like China, Honk Kong as well as India the group is certainly on the path of long term growth. Through the paper we study the financial reports of the company and comment upon the disclosures of the non-current assets of the company. We also illustrate the importance of the information disclosed to the users of the financial statements. (www.nextplc.co.uk accessed on 11/11/2012)

2. Disclosure of Non-Current Assets of NEXT in the Financial Statements IFRS constantly demands that the disclosure of information to the stakeholders of the business be robust and constantly updated. The IFRS has constantly amended and updated the rules and regulations related to the disclosure of the Non-current assets in the financial statements such that the high quality information is available to all the stakeholders (Ernst and Young, 2011) Thus each of the plc.s have to abide by the accounting standards and the rules set up by the IFRS as it is important to disclose quality information to the stakeholders. NEXT also has to abide by the rules and regulations set up by the IFRS, as can be seen in the disclosure of their information related to the non-current assets. Next a retail chain was launched in the UK in February 1982; the store consisted for a wide variety of clothes for both men and women. Over the years NEXT has extensively expanded its scale of operations in UK as well as globally. Currently there are about 536 stores of Next in the UK. The corporation has over 200 stores in 30 countries globally. To capture the wide network of customers that the group could reach through the web, Online shopping facility was launched in 1999 with express delivery. The group has extensively focused on providing customer satisfaction and constantly widening its customer base. The company also promises its shareholders extensive long term growth and increased earnings of shares. With group operations in growth countries like China, Honk Kong as well as India the group is certainly on the path of long term growth. (www.nextplc.co.uk accessed on 11/11/2012)

NEXT has invested considerably in its assets as the value of the total assets has been increasing continuously since 2009 onwards. The company has experienced a marginal drop in the value of the asset in 2010; this can be attributed to the overall economic conditions prevailing in global economy, as well as the UK economy. The Global Financial Crisis has impacted the UK economy limiting the investment of the company in the new assets. The figure below shows the Total Assets of the company: Figure 1: Assets of NEXT (Source: Annual Report Next 2011 accessed on 11/11/2012) The asset of the firm have increased from 1571000 in 2007 to 1694000, there has been a minor decline in the value of the asset in 2009, limiting the investment in the assets during the period. The UK economy has experienced a balanced and steady growth from the early 90s till 2007; this growth has been largely attributed to the growth in exports. The subsequent expansion of the economy has been attributed to this fact. In 2008, Britain experienced a sharp downfall in the growth of the economy as the Global Financial Crisis spread fast to the British economy as well.

Originated as the subprime lending crisis in America the crisis spread affecting the liquidity of the companies globally. The British economy can describe as one of the worst affected economies as it slipped into negative growth and a deep recession. The economy showed some signs of recovery in 2009, with marginal improvement in the economic growth rate. Next also to some extent has been affected by the economic crisis, as the company had limited opportunities to expand their investments in assets. (Martin, 2010)

Asset growth of the company has been further restricted as a result of the Euro- zone crisis as well. As next is a UK based company, European economic climate is bound to have an effect on the company. The European debt crisis that originated in 2009, with global thinkers arguing that Europes economic situation has worsened over the past five years. The fiscal burden on Europe has been mounting, with the situation of the Greece economy continuously worsening, the Euro Zone has a debt/GDP ratio of 60%, the same trend has also been observed in France and Germany as well. The rising cost of debt and the debt burden on the economy has continuously been increasing with the Greek economy being the worse of the a lot. The crisis has intensified as a result of excessive government spending the current Greek Debt is 300 billion ($413.6 billion) with a rising fiscal deficit of 12.7%. The continuous contraction of the Greek economy has resulted in pressuring rest of Europe as well (cnn.com accessed on 9/5/2011, Kganyago, 2012)

Despite the threat posed by Europe Next has effectively managed to undertake expansion plans, by spreading operations in India and China. The asset of the firm have increased from 1571000 in 2007 to 1694000, there has been a minor decline in the value of the asset in 2009 , but the company has performed considerably well has maintained positive profits and healthy investments in assets creating value for all the stakeholders of the company.

3. Benefits to the Users of Financial Statements

The main objective of the use of financial statements is to enable the assessment of financial performance of the corporation. The analysis of the financial statements of the company enables the stakeholders to analyse the business professionally and ensure the creation of value for their investment. The financial statements of the corporation reflect the changes in the policies of the company as well as any accounting changes that have been introduced by the accounting governing bodies like the IFRS. Therefore it would not be incorrect to say that the financial statements are a reflection of the decision making that takes place in the organization. As a public limited company NEXTs financial information has to be disclosed to the general public through its annual reports. The annual reports of the firm contain a wide variety of information related to the Assets and the liabilities of the firm. The users of the financial statements are wide and differed, these range from customers, suppliers, investors as well as the management of the firm. The financial statement of NEXT provides a detailed account on the Non-Current Assets of the firm. The report clearly states the current value of the assets, as well accounts for the sale and purchase of any asset if conducted over the year. Depreciation is critical to the value of a non-current asset.

Depreciation has also been effectively accounted for. Each of the non-current assets has a distinct depreciation account and clearly highlights the depreciation process over the current fiscal. Therefore it would not be incorrect to say that the financial statements of NEXT provide suitable information to the users of these reports. They effectively satisfy the needs of all the stakeholder groups. The main objective of the use of financial statements is to enable the

assessment of financial performance of the corporation. The analysis of the financial statements of the company enables the stakeholders to analyse the business professionally and ensure the creation of value for their investment. The financial statements of the corporation reflect the changes in the policies of the company as well as any accounting changes that have been introduced by the accounting governing bodies like the IFRS. Therefore it would not be incorrect to say that the financial statements are a reflection of the decision making that takes place in the organization. The financial statements effect the final decision making undertaken by the management of the firm. For instance in the above case of NEXT where a marginal decrease in the growth of assets has been projected between 2009-2010 , as the assets of the firm have decreased from 1.7 million (approx.) to 1.6 million (approx.) , the management should effectively identify the change in the value of the asset. After the identification of the change in the value of the asset, the reason for the decrease in the value should be identified. In this case , NEXT has invested considerably in its assets as the value of the total assets has been increasing continuously since 2009 onwards. The company has experienced a marginal drop in the value of the asset in 2010; this can be attributed to the overall economic conditions prevailing in global economy, as well as the UK economy. The Global Financial Crisis has impacted the UK economy limiting the investment of the company in the new assets. Thus, the use of the financial statement by the management can enable them to identify the problem areas and then adopt effective strategies to overcome those problems, over the next accounting period. The financial statements reflect the true view of the position of the company. (Tulsian 2002, Martin 2010 and Annual Report Next 2011- accessed on 11/11/2012)

Thus, the financial statements disclosures a critical to the success of such an organization as the users of these financial statements are spread globally. Next has effectively taken care of all the prescribed accounting standards and the financial disclosures are aimed at satisfying the differed needs of the stakeholders of the company.

4. Conclusion The annual reports of the firm contain a wide variety of information related to the Assets and the liabilities of the firm. The users of the financial statements are wide and differed, these range from customers, suppliers, investors as well as the management of the firm. The financial statement of NEXT provides a detailed account on the Non-Current Assets of the firm. The report clearly states the current value of the assets, as well accounts for the sale and purchase of any asset if conducted over the year. Depreciation is critical to the value of a non-current asset. Over the years NEXT has extensively expanded its scale of operations in UK as well as globally. Currently there are about 536 stores of Next in the UK. The corporation has over 200 stores in 30 countries globally. To capture the wide network of customers that the group could reach through the web, Online shopping facility was launched in 1999 with express delivery. The group has extensively focused on providing customer satisfaction and constantly widening its customer base. The company also promises its shareholders extensive long term growth and increased earnings of shares. With group operations in growth countries like China, Honk Kong as well as India the group is certainly on the path of long term growth. Thus, the financial statements disclosures a critical to the success of such an organization as the users of these financial statements are spread globally. Next has effectively taken care of all the prescribed accounting standards and the financial disclosures are aimed at satisfying the differed needs of the stakeholders of the company.

5. References Business overview Next Plc. Next Plc. N.p., n.d. Web. 14 Nov. 2012. . Ernst, Young. IFRS 7 Financial Instruments: Disclosures Impending changes effective for 2011 and 201. Ernst and Young 7.1 (2010): 1. Print. Next, Plc. Next. Annual Report Next 2011 1.1 (2011): 1-150. Print. Martin, Bill. Rebalancing the British economy: a strategic assessment. UK Innovation Research Centre 1.1 (2010): 1-100. Print. Tulsian, P. C.. Accountancy for CA intermediate examination. New Delhi: Tata McGraw-Hill Pub., 2001. Print Next, Plc. Next. Annual Report Next 2011 1.1 (2011): 1-150.