Accounting conservatism and managerial risks - Myassignmenthelp.Com

Questions: 1. From your firms financial statement, list each item of equity and write your understanding of each item. Discuss any changes in each item of equity for your firm over the past year articulating the reasons for the change. 2. What is your firms tax expense in its latest financial statements? 3. Is this figure the same as the company tax rate times your firms accounting income? Explain why this is, or is not, the case for your firm. 4. Comment on deferred tax assets/liabilities that is reported in the balance sheet articulating the possible reasons why they have been recorded. 5. Is there any current tax assets or income tax payable recorded by your company? Why is the income tax payable not the same as income tax expense? 6. Is the income tax expense shown in the income statement same as the income tax paid shown in the cash flow statement? If not why is the difference? 7. What do you find interesting, confusing, surprising or difficult to understand about the treatment of tax in your firms financial statements? What new insights, if any, have you gained about how companies account for income tax as a result of examining your firms tax expense in its accounts? Answers: Answer 1 The items of equity is depicted in balance sheet of Bapcor limited and it comprised of contributed equity, retained earnings or accumulated loss and other reserves. Contributed equity is one of elements of total equity that is recorded by organization that is split between common stock accounts and additional paid in capital. It refers to shares that have been bought directly by public from company either in the form of stock issuance and initial public offerings (Nichols et al. 2017). Retained earnings are the profits or cumulative earnings that are reinvested by company in business less distributions and dividend paid to investors. It is not distributed to shareholders by way of dividend but they are invested for in business for specific purpose. Reserves are the amount that is used to purchase fixed assets, repayment of debts and funding expansions. Capital reserves and revenue reserves are the two types of reserves. Revenue reserves are the profits that are earned by normal operations of business. General reserves and special reserves are the two types of revenue reserves. Capital profits are profits that are created out of profits that help in setting aside capital losses (Gan 2016). Total value of equity of organization increased in year 2016 to $ 366220 million compared to $ 266925 million in year 2015. This increase in total value of equity is attributable to the fact of increase in total reserves and contributed equity. Contributed equity value stood at $ 416427 million in year 2016 as against $ 337390 in year 2015. Other reserves value increased from $ 441 million isn year 2015 to $ 845 million in year 2016. Increase in total equity value is further attributable to fall in accumulated loss to $ 51052 in year 2016 compared to $ 70906 million in year 2015 (Bapcor.com.au 2018). Hence, increased in total equity value is because of decline in accumulated loss and increase in value of other reserves and contributed equity. Answer 2 Income tax expense is the amount of tax payable on the taxable income of particular period that is based on applicable rate of income tax. Income tax expense is comprised of current tax profits for the particular year, adjustments hat have been recognized for prior period, deferred tax expenses and relating to discontinued operations. Income tax is attributable to profit from discontinued and continued operations. Expense related to income tax is depicted in the consolidated statement of comprehensive income. Total income tax expense constitute of deferred tax, current tax and over provision in prior years. Income tax expense increased considerably in year 2016 to $ 18534 million compared to $ 9177 million in year 2015. There was further increase in income tax expense to $ 25988 in year 2017. Cash outflow related to payment of income tax increased from $ 18004 million in year 2016 compared to $ 3642 million in year 2015 (Bapcor.com.au 2018). Answer 3 The effective income tax rate that is applicable to organization is equivalent to corporate tax rate of Australia that is 30%. Accounting income of Bapcor limited stood at $ 43582 million in year 2016 and $ 19507 in year 2015 respectively. Higher value in year 2016 is indicative of the fact that there was considerable increase in accounting income of organization. Amount of the tax rate times the accounting income for both the years is computed at (30% * $ 43582= 13074.6) for year 2016 and (30% *$ 19507= 5852.1) for year 2015. From the computation of above figures, it can be seen that income tax expense for year 2016 is more than $ 13074.6. Furthermore, it can be seen that income tax expense for 2015 is more than $ 5852.1 (Bapcor.com.au 2018). Therefore, the figures of income tax expense are not same as the company tax rate times the accounting income. This difference is attributable to the fact that income tax is charged on various items and there are many types of taxation charge incurred by company. In some year, income tax is deducted as it has already been incurred while in other year there are addition to income tax charged that leads to differences between the value of income tax expense and accounting income percentage times tax rate. Answer 4 Deferred tax assets have been reported under noncurrent assets in the statement of financial position of company. Amount of deferred tax assets reported in the statement of financial position is recorded at $ 20614 million in year 2016. Value of deferred tax assets was recorded at $ 11847. Value of deferred tax assets stood at $ 18664 in year 2017 (Bapcor.com.au 2018(. Recognition of deferred tax assets and liabilities is attributable to unused tax loss, temporary differences and any adjustments that have been recognized for prior periods. However, deferred tax liabilities have not been recognized in the statement of financial position. Recognition of deferred tax assets are done for unused tax losses and deductible temporary differences (Hu et al. 2014). This is done only if the availability of future taxable amount is done for utilizing temporary losses and differences. Recording of deferred tax assets in the consolidated financial statement has been done because members of tax con solidated group has recognized temporary differences using the approach of separate tax payer within the group. Bapcor limited has recorded deferred tax assets deferred tax assets arises from tax credits of tax consolidated group and unused tax losses. Deferred tax assets increased from $ 573000 in year 2015 compared to $ 839000 in year 2016 (Bapcor.com.au 2018). Answer 5 The current annual report of Bapcor limited records total amount of income tax payable by company in particular year and current tax assets. Bapcor limited has recorded income tax payable in both current year and previous year. Organization has recorded current tax liabilities at $ 6236000 in year 2016 as against $ 5098000 in year 2015. Amount of income tax payable has reduced in year 2017 to $ 3455 (Bapcor.com.au 2018). There been no current tax assets that have been recorded in both the years. Current tax assets are offset when organization has legally enforceable right to do so and setting the same of net basis for settling the liabilities and realizing the assets simultaneously. The income tax payable by company in every particular year is different from income tax expense. Income tax payable for year 2016 stood at $ 6236000 while income tax expense stood at $ 18534000 (Bapcor.com.au 2018). It is indicative of the fact that income tax liabilities of Bapcor are significantly highe r than income tax expenses. Income tax payable is the liability that is incurred by organization that is based on profitability reported. Amount that is paid as an income tax is not solely based on business accounting profits. Accounting profits might get altered for resulting in taxable profits due to number of adjustments as imposed by government. Timing differences would arise resulting from these adjustments leading to differences between tax reporting and profit recognition for accounting purpose. Consequently, differences would arise between income tax reported by company in their income statement and the amount of income tax payable. Answer 6 Income tax expense of Bapcor limited is recorded in the statement of comprehensive income while total amount of income tax paid is recorded in cash flow statement. Income tax expense for year 2016 is recorded at $ 18534 and on other hand, income tax paid is recorded at $ 18004. Hence, for year, income tax paid is different from income tax payable by amount $ 530 (18534- 18004). On other hand, income tax expense for year 2015 stood at $ 9177 while income tax paid was recorded at $ 3642. Therefore, income tax expense is more than income tax paid by amount $ 5535 (9177-3642). From the analysis of above figures, it can be inferred that there is considerable difference between income tax paid and income tax expense. The income tax expense of Bapcor limited is the amount of tax payable on the taxable income of current period based in income tax rate that is applicable. Income tax paid is the amount of income tax liability of organization. Income tax expense is calculated based on accounting profit that requires accrual method of accounting that deals with recording expenses. Tax expense is comprised of deferred tax and current tax that is incorporated in net profit and loss determination for particular period. On other hand, income tax payable is determined by the concept calculation taxable income that is determined by taxation rules followed by company. Hence, former make use of net accounting profit and latter uses financial accounting concept (Kravet 2014). Tax accounting forms the basis of computation of income tax expense that takes into consideration of understanding the effect events on income taxes such as valuation allowances, net operating loss/profit and changes in rate of tax. Moreover, the differences between income tax paid and income tax expense is attributable to principles of general accounting principles. Difference between accounting income and taxable income is classified into timing and permanent differences. Permanent difference does not occur reversely as they originate in one period and do not repeat (Ahadiat and Martin 2016). It can be explained with the help of an instance, if only a part of an expenditure item is allowed by tax laws if the purpose is to compute taxable income, there would be permanent difference resulting from disallowed amount. Differences in the amount of income tax expense and income tax payable is also attributable to timing differences that is a difference between accounting income and taxab le income for a period that is capable of reversing in on period and originate in other period. The reason attributable to differences in timing is because the period in which some items of expenses and revenue are included in the taxable income that does not coincide with the period in which recording of such expenses and revenue have been done or have been considered when arriving at accounting income (Ermakova and Gudshatullaev 2016). This explains why there exist difference between income tax paid and income tax expense. Income tax payable is determined by taxable laws and there exist difference between requirement of computing taxable liabilities and the accounting policies that have been applied for determination of accounting income that forms the basis of computation of income tax expenses (Penner et al. 2016). It is certainly possible that the impact of accounting income on income tax expense and taxable income in determining income tax liability might not be same. Answer 7 The treatment of taxation in the financial statement of Bapcor limited has been interesting as there was segmented presentation of treatment of income tax items. There have been detailed explanations of deferred income tax assets and deferred income tax liabilities in comprehensive income. It gives the explanation of determination of deferred income tax that has been done by using Australian corporation tax rate. It has been ascertained that temporary differences is the reason attributable to difference between deferred tax liabilities and income tax expense (Nichols et al. 2017). Hence, analysis of the financial statement presented in the annual report of company depicts that company has separate presented the descriptions of income tax. Examination of income tax has been done in context of income expense, recognition of taxation amount in equity and there is detail explanation of numerical reconciliation of income tax expense. Manner in which organization computes income tax expens es that arises from ordinary activities and attributable to profit are presented separately. Determination of income tax expense is done by considering income tax rate that is applicable to organization and taking into account taxable income of current period for each jurisdiction by making adjustment to changes in deferred tax liabilities and assets resulting from unused tax loss and temporary differences due to accounting income and taxable income (Wang and Makar 2015). Moreover, it has been analyzed that income tax expense in each period is higher than income tax paid. Income tax expenses of organization have been increasing year on year due to increase in amount of profit reported. References list: Ahadiat, N. and Martin, R.M., 2016. Necessary attributes, preparations, and skills for the selection and promotion of accounting professionals.Journal of Accounting and Finance,16(1), p.11. Bapcor.com.au. 2018. [online] Available at: https://www.bapcor.com.au/Reports/Bapcor-2016-Annual-Report-FINAL-FOR-LODGEMENT.pdf [Accessed 2 Jan. 2018]. Caskey, J. and Laux, V., 2016. Corporate governance, accounting conservatism, and manipulation.Management Science,63(2), pp.424-437. Dagwell, R., Wines, G. and Lambert, C., 2015.Corporate accounting in Australia. Pearson Higher Education AU. Deegan, C., 2014. An overview of legitimacy theory as applied within the social and environmental accounting literature.Sustainability accounting and accountability, pp.248-272. Ermakova, N.A. and Gudshatullaeva, E.M., 2016. Peculiarities of the Application of Income Tax Standards by the Subsidiary Company in the Russian Accounting Practice.International Journal of Environmental and Science Education,11(13), pp.5873-5882. Gan, F., 2016. New Achievements of Government Accounting Reform in ChinaGovernmental Accounting StandardsBasic Standards.Modern Economy,7(04), p.450. Goswami, M., 2014. Corporate Environmental Accounting: The Issue, Its Practices and Challenges; A Study on Indian Corporate Accounting Practices.IOSR Journal of Business and Management,16(5). Hu, J., Li, A.Y. and Zhang, F.F., 2014. Does accounting conservatism improve the corporate information environment?.Journal of international accounting, Auditing and Taxation,23(1), pp.32-43. Kravet, T.D., 2014. Accounting conservatism and managerial risk-taking: Corporate acquisitions.Journal of Accounting and Economics,57(2), pp.218-240. Lee, R.T., 2016. Fixed and Variable Costs: When Accounting Is the Opposite of Cash Flow Reality.Journal of Corporate Accounting Finance,27(4), pp.31-35. Lee, T.A., 2014.Evolution of Corporate Financial Reporting (RLE Accounting). Routledge. Nichols, N., Betancourt, L. and Scott, I., 2017. The FASB Simplifies the Accounting for Share?Based Payments.Journal of Corporate Accounting Finance,28(4), pp.8-19. Penner, J., Kreuze, J. and Langsam, S., 2016. Analysis of Simplification of Accounting Initiative for Inventory and Update of Other Simplification Proposals.Journal of Corporate Accounting Finance,27(4), pp.9-12. Wang, L. and Makar, S., 2015. FX Cash Flow Risk Management: Financial Reporting Issues and Practical Implications.Journal of Corporate Accounting Finance,26(2), pp.59-62. Warren, C.S. and Jones, J., 2018.Corporate financial accounting. Cengage Learning. Williams, J., 2014.Financial accounting. McGraw-Hill Higher Education.

Describe the Benefits of a University Education free essay sample

Describe the benefits of a university education With the society developing faster, more professional people are needed, the university education begins to play a role which has never been such important before. A variety of facts have already proved that, not only an individual person, but also the whole society benefit from the university education. The support of this essay is to discuss how university education affects the world. For the individual, firstly, university is one of the very places where he gains the most practical knowledge and cultivates the academic skills due to which he can feed himself as well as his family. Many investigations demonstrate that people who have the experience of studying in university as well as people with a Master degree or Doctoral degree live a higher quality of life than those who does not receive a university education. Secondly, university is also the very place where young adults firstly acquire their social skills. We will write a custom essay sample on Describe the Benefits of a University Education or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Researchers have found that the graduate from university always have better ability of carrying out different kinds of problems. As the modern universities are becoming more synthetic, what students can learn from university is beyond academic lore, it is a combination of different types of capability. The graduates are generally adept in the art of being a social animal, mastering the important ability such as to judge and to pardon. Furthermore, university education does the country great favor. Firstly, university education helps the society solve many thorny problems in a certain extent. To run a university needs not only professors and students but also many other staff to be responsible for the daily affairs. This requires a great numbers of people to attend work, providing more positions of job. Owning to this, the hard situation of employing can be eased. The less people without income to feed himself, the stronger psychological balance they will have, and the society will be more stable. Secondly, university education increases the averaged accomplishment of the society. Citizens may be more civilized after having further education, which will make them obey the law and regulation consciously. The more people accept further education, the deeper the spiritual civilization will immerse into the social atmosphere. This helps the society progress at a higher speed faster because more vigor can be made full use of to construct instead of to supervise and to manage. With qualified personnel outputted by university, the society can grow in a healthy way. In conclusion, university education is not only for university student, but also for different stratum of the country. University education supply knowledge to the learners as well as opportunities of surviving to the livelihood, since it benefits both the individual person and the whole society a lot, it is widely believed that the importance of university will continue increasing as the world grows.

Critical Evaluation of Binaural Hearing Marketing Strategy Cochlear Ltd

Free Essays on Yellow Wallpaper

What a Night! It was a beautiful, warm Thursday evening. I was wandering foolishly through the neighbor’s gardens in search of glowing fireflies. I stumbled across a group of three fireflies, all with their lights shining, except for one. As I knelt down to pick up the helpless little creature, I heard a strange and unfamiliar noise. I flung myself to the ground as not to be caught. I clung to the grass for a few minutes, but the sound would not stop. I slowly raised my head to see what could be capable of making this sort of strange noise. A third story window in the house that occupied the property I was trespassing on caught my attention. A dim, yellow light shined in the room. I saw strange shadows on the ceiling, which I made out to be a woman. She looked to be circling the room in a slow manner. In her hands she grasped a large object, something flimsy and lightweight. I crawled to the base of an apple tree and carefully climbed up to the top branch. From there, I could confirm my speculations. I could not believe what my eyes saw; a deranged woman tearing wallpaper off the wall of her room, and flailing it around violently. The tearing of the wallpaper was the unexplainable sound that I had been hearing. Scared, I jumped out of the tree and ran home in fear of my life. Since that night, I have never stepped foot on that property again.... Free Essays on Yellow Wallpaper Free Essays on Yellow Wallpaper â€Å"The Yellow Wallpaper†, written by Charlotte Perkins Gilman is an account of a mentally disturbed woman. The woman portrayed in this short story plays the role of a dominated, inferior lady who is not outspoken and willing to take a stand on behalf of her own well being. She does not realize she can have her own ideas and stand up for herself; this is her main problem in the story. By applying all the concepts of style, symbolism and time era Charlotte Perkins Gilman has conceived a well-written story. The time frame has a great importance to the overall story. The account does not just deal with a woman going insane but a woman’s standing in society in the late 1800’s. During the time in which Gilman’s piece was written, women were not often prominent figures in society. Men frequently dominated them, and it was rare to find a very outspoken female willing to stand up for her own well-being. It is a very disturbing look at how a man could have dominated a lady in the time frame in which the story was set. It exemplifies how woman were disregarded at times and treated like frail beings at others. All woman really needed was moral or emotional support to break free of a male dominated society. Throughout the story symbolism is a strong key point. The wallpaper has many symbolic examples in it. The pattern at one point in time start to look like bars and the woman behind them is constantly shaking them at night to escape. The key factor is that the woman is somehow freed from the bars during the day, yet trapped behind them at night. This is symbolic of her husbands not being home during the days, while he is working. During this time she is alone and free to be herself, without anyone’s rules to suppress her emotions. Because of this she does not feel the urgent need to escape. At night however when her husband returns home she is thrown back behind those imaginary bars that symbolize her feelings of control. In the ... Free Essays on Yellow Wallpaper What a Night! It was a beautiful, warm Thursday evening. I was wandering foolishly through the neighbor’s gardens in search of glowing fireflies. I stumbled across a group of three fireflies, all with their lights shining, except for one. As I knelt down to pick up the helpless little creature, I heard a strange and unfamiliar noise. I flung myself to the ground as not to be caught. I clung to the grass for a few minutes, but the sound would not stop. I slowly raised my head to see what could be capable of making this sort of strange noise. A third story window in the house that occupied the property I was trespassing on caught my attention. A dim, yellow light shined in the room. I saw strange shadows on the ceiling, which I made out to be a woman. She looked to be circling the room in a slow manner. In her hands she grasped a large object, something flimsy and lightweight. I crawled to the base of an apple tree and carefully climbed up to the top branch. From there, I could confirm my speculations. I could not believe what my eyes saw; a deranged woman tearing wallpaper off the wall of her room, and flailing it around violently. The tearing of the wallpaper was the unexplainable sound that I had been hearing. Scared, I jumped out of the tree and ran home in fear of my life. Since that night, I have never stepped foot on that property again.... Free Essays on Yellow Wallpaper Take control â€Å"The Yellow Wallpaper† is a story based on â€Å"rest cure† treatment, developed after the Civil War by famous physician S. W. Mitchell, which required confining the patient to a remote residence on complete bad rest, increased food intake, supplements and exercise, massage and, at times, electric shock therapy. But the story actually is not a discussion about treatment methods of common mental disorders but about a struggle of personality- about a woman that tying to find independent way of living. The narrator, a young women in her thirties, faces deep identity problems, that lead her to extraordinary ways to express herself. To understand what is really going on with the person, we have to take a look at the environment that surrounds her. The fact that she is not at home but in temporary â€Å"ancestral hall for summer† and moved there just a few weeks ago, to the idea that this is not about her physical environment, but her emotional state we are talkin g here and the problem has not appeared itself just a few weeks ago; rather physical environment only triggered it making it noticeable. As opposite to temporal, that can be changed, her emotional surrounding is constant and this is what we will try to focus on. We believe, that â€Å"nervous breakdown† was result of continuous struggle to find her own personality and be accepted as she is, not the way it convenient for others to see her. The first figure that mention here is her husband John, who is her physician as well, and the reason she does not get batter, from her words. There are many reasons for psychological problems to occur, and one of them is extreme loneliness of narrator and lack of support from others. In this family husband presents a narcissistic, self-loving figure, that confident in self-perfection. He does not take his wife seriously as a partner and friend, keeping her away from his business. He leaving in a morning and come back late, only tell...

Racism Essay Example | Topics and Well Written Essays - 250 words

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Radical feminist vs Liberal feminism Research Paper

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Advertisements and Tourism Websites Essay Example | Topics and Well Written Essays - 500 words

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