Corporate Accounting: Financial Statement Analysis of ASX Listed Companies

Running head: CORPORATE ACCOUNTING
Corporate accounting
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CORPORATE ACCOUNTING
Executive summary
The report will focus on the financial statement of various ASX listed companies with regard
to equities, liabilities, cash flows statement, other comprehensive income and corporate taxes.
Selected companied for this report will be Newcrest Mining Ltd, AngloGold Ashanti Ltd and
Northern Star Resources Ltd. The report will focus on the changes in amounts of various
items under equities, liabilities and cash flows. It will further, highlight the tax aspect
including various taxes like cash tax, book tax and deferred tax.

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CORPORATE ACCOUNTING
Table of Contents
Introduction................................................................................................................................4
Equity and liabilities..................................................................................................................5
(i) Equity items.................................................................................................................5
(ii) Liability items..............................................................................................................7
(iii) Comparative analysis of debt and equity position.....................................................10
Cash flow statement.................................................................................................................11
(iv) Listed cash flow items...............................................................................................11
(v) Comparative analysis.................................................................................................12
(vi) Comparative analysis selected for explaining insights..............................................15
Other comprehensive income statement..................................................................................15
(vii) Reported items under other comprehensive income (OCI).......................................15
(viii) Why items of OCI are not reported in the profit and loss statement.....................16
(ix) Comparative analysis of items reported under OCI..................................................16
(x) Including comprehensive income for evaluating the manager’s performance..........17
Accounting for corporate income tax.......................................................................................17
(xi) Reported tax expenses for 2017................................................................................17
(xii) Effective rate of tax...................................................................................................17
(xiii) Deferred tax assets or deferred tax liabilities.........................................................18
(xiv) Increase or decrease in deferred tax assets or liabilities reported by the entities. .18

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CORPORATE ACCOUNTING
(xv) Cash tax.....................................................................................................................19
(xvi) Rate of cash tax......................................................................................................19
(xvii) Difference of cash tax rate from the book tax rate................................................20
Conclusion................................................................................................................................20
Reference..................................................................................................................................21
Appendix..................................................................................................................................23

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CORPORATE ACCOUNTING
Introduction
Newcrest Mining Ltd is among the largest gold mining entities. They deliver the
superior return safely to the shareholders through recognising, developing and operating the
copper and gold mines. Further, the company is committed to wards maintaining the safe
environment for the people through developing and maintaining the mines in sustainable way
in compliance with the environmental standards and creating the long term relationship with
the communities under which they operate their business. Vision of the entity is to be the
miner of choice for the people, stakeholders, suppliers, partners and host communities
(Newcrest Mining Limited 2019).
AngloGold Ashanti Ltd from South Africa is globally diversified entity with world
class portfolio of the projects and operations. It has 3 projects and 14 mines in 10 countries.
Mission of the company is to create value for the employees, shareholders, social and
business partners through responsibly and safely mining, exploring, marketing and mining of
the products. Though the primary focus of the company is goal, it pursues the value creating
opportunities for other minerals where the company can leverage the existing assets,
experience and skills for improving the value delivery (AngloGold Ashanti 2019).
Northern Star Resources Limited is the global-scale and high grade underground for
gold mines and the company is firmly focussed for maximising the returns for the
shareholders. It continues investing for creating the strong asset base through the aggressive
exploration and strategic acquisition for extending the lives of mine through the world class
operations (Nsrltd.com 2019).

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CORPORATE ACCOUNTING
Equity and liabilities
(i) Equity items
Newcrest Mining Ltd – listed equity items for the company are mentioned below –
 Issued capital – issued capital is the share capital issued to shareholders. Share capital
is the part of authorised capital that can be issued as per the articles of the entity.
 Accumulated losses – accumulated losses is the negative balance in the retained
earnings. The accumulated loss is generated when cumulative losses have been
experienced by the entity and payment of dividend exceeds cumulative profits
amounts (Reid and Myddelton 2017).
 Reserves – reserves are the profit portion that is earned through normal operation of
the company that is set aside for future purposes. Revenue reserves are segregated
into specific reserves and general reserves.
 Non-controlling interest – it is the equity portion in the subsidiary that is not
attributable t parent entity that has controlling interest that is more than 50% but less
than 100% and is consolidated into the financial result of the subsidiary with own
(Sarfaty 2015).
Changes in equity are as follows –
Reserves amount of the company has been changed due to changes in the amount of
Foreign Currency Translation Reserve.

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CORPORATE ACCOUNTING
AngloGold Ashanti Ltd – listed equity items for the company are mentioned below –
 Share capital and premium – fund accumulated through issuance of the share in
exchange for cash or for any other thing is regarded as share capital. If the entity
decides issuing the share at the price that is higher as compared to the nominal value
or the face value the share is issued at the premium. This is quite normal practice for
the entities with strong financial position (Melloni, Lai and Stacchezzini 2018).
 Accumulated losses – discussed in Newcrest Mining Ltd
 Non – controlling interest – discussed in Newcrest Mining Ltd
Changes in equity are as follows –
Amount for share capital has been changed due to issuance of ordinary share.
Northern Star Resources Ltd - listed equity items for the company are mentioned below –
 Share capital – discussed in AngloGold Ashanti Ltd
 Reserves – discussed in Newcrest Mining Ltd
 Retained earnings – it is the part of business profits that is arrived through income
statement where the net profit is also used under balance sheet as well as cash flow
statement. It is not distributed for dividend and is reserved for the purpose of re-
investment (Sethi 2016).
 Changes in equity are as follows –

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Retained earnings amount has been increased due to increase in the amount of net
profit.
(ii) Liability items
Newcrest Mining Ltd – listed liability items for the company are mentioned below –
 Trade and other payable – it is the amount of bill raised to the entity by the suppliers
for the delivered goods or provided services in ordinary course of the business.
 Borrowing – it is the arrangement of fund through banks, financial institutions.
Generally the borrowings are repaid with the interest and repayment is made based on
the term of payments (Watson 2015).
 Provisions – it is the amount that is kept side to meet the projected liability that is
uncertain. Amount kept aside as provision are kept for using to fulfil the future
obligations.
 Current tax liability – current tax obligation is most straightforward as it represents
the tax obligation of the business associated with to current period’ taxable earnings.
 Deferred tax liabilities – DTL is the tax assessed or that is due for current period but
payment for which has not been made. It is generated through timing difference in the
paid tax and accrued tax (Laux 2013).
Changes in liability are as follows –