As the economy becomes more international in scope, users of financial statements may be expected to analyze companies that are not incorporated in the United States. Diageo is a major world corporation located in London. It owns many familiar U.S. businesses such as the Pillsbury Company, Burger King, and Haagen-Dazs ice cream.

Required:

Based on the concepts presented in this book, explain the meaning of the various account classifications shown on the portion of the Diageo annual report presented here. (Note: There are five reserve accounts. The middle three relate to topics that are discussed in advanced accounting courses.)

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DIAGEO Consolidated Balance Sheet At 30th September Current Year Notes m Prior Year m m m Fixed assets Intangible assets Tangible assets 11 Investments 13 122 2,652 588 3,839 3,280 144 206 6.635 4.074 Current assets Stocks 14 Debtors 15 15 1.269 761 1,451 873 Cash at bank and in hand 215 138 2.935 1,772 Creditors due within one year Borrowings 17 Other creditors 19 79 (362) (187) (2.316) (1,301) (2,678) (1,488) Net current assets Total assets less current liabilities Creditors due after more than one year 15 257 284 6,892 4,358 Borrowings Other creditors 78 17 (3,494) (702) 20 (231) (163) (3,725) (865)