Corporate Accounting: Financial Statement Analysis of ASX Listed Companies

The report analyses the financial statements of ASX listed companies including Newcrest Mining Ltd, AngloGold Ashanti Ltd and Northern Star Resources Ltd. It focuses on equities, liabilities, cash flows, other comprehensive income and corporate taxes. The report provides a comparative analysis of debt and equity position, cash flow statement and listed cash flow items.

Running head: CORPORATE ACCOUNTING
Corporate accounting
Name of the student
Name of the university
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Author note

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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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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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(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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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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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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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 –

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Amount of non-current borrowings have been changed due to payment of old
borrowings. Deferred tax liability has been changed due to charges to income for temporary
differences on fixed assets.
AngloGold Ashanti Ltd – listed liability items for the company are mentioned below –
 Borrowing – discussed in Newcrest Mining Ltd
 Environmental rehabilitation and other provisions – it includes the provisions for
decommissioning, provisions for restoration.
 Provision for pension and post-retirement benefits – it includes the defined benefit
plans that is made for pension, medical schemes, provident fund that covers almost all
the employees
 Trade and other payables and deferred taxes – discussed in Newcrest Mining Ltd
 Deferred taxation – discussed in Newcrest Mining Ltd
Changes in liability are as follows –

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Amount of current borrowings have been changed due to payment of old borrowings
and raising new borrowings. Deferred tax amount has been changed due to charges to income
for temporary differences on fixed assets.
Northern Star Resources Ltd – listed liability items for the company are mentioned below –
 Trade and other payables – discussed in Newcrest Mining Ltd
 Borrowings – discussed in Newcrest Mining Ltd
 Current tax liabilities – discussed in Newcrest Mining Ltd
 Provisions – discussed in Newcrest Mining Ltd
 Deferred tax liabilities – discussed in Newcrest Mining Ltd
Changes in liability are as follows –

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Amount of trade payables have been changed due to payment of old payables and
generation of new payables. Amount of current borrowings have been changed due to
payment of old borrowings and raising new borrowings. Deferred tax amount has been
changed due to charges to income for temporary differences on fixed assets.
(iii) Comparative analysis of debt and equity position
Debt –equity amount –
Debt-equity percentage –
Debt equity comparison is carried out to analyse the company’s solvency position. If
the company has high debt component it represents that the company’s solvency position is in
threat as high debt portion will increase its leverage. On the other hand, higher level of equity

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represents the stable position of the company as lower percentage of debt will not threaten the
company towards insolvency. From the above it is recognised that the Newcrest Mining Ltd
and Northern Star Resources Ltd has low proportion of debt that is 33% to 35%. On the other
hand, debt component of AngloGold Ashanti Ltd is 62.54% that is significantly high as
compared to other 2 entities. Hence, the leverage position of AngloGold Ashanti Ltd is high.
Cash flow statement
(iv) Listed cash flow items
Cash flow statement of selected entities represent the aggregate data regarding the
cash inflows of the entity received from the operating activities, investing activities and
financing activities. Details of each item are as follows –
 Cash from operating activities – this section represents the cash generating ability of
the entity from the core activities. It includes the net income, adjustments for non-
cash expenses and changes in the working capital.
 Cash from investing activities – this section represents the aggregate changes in the
cash flow position of the company resulted from the investment gain and losses and
changes resulted from amount spent for capital asset like plant and property (Pavlović
and Bogdanović 2013).
 Cash from financing activities – this section accounts for the external activities that
allows the entity to raise capital. Apart from that, the financing activities include
repayment made to investors, changing or adding up, loans and issuing stocks.
Changes for the items of cash flows statement –
 Newcrest Mining Ltd – cash used for investing activities has been increased from $
427 million to $ 728 million. The increased amount was contributed towards payment

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for the investment and selling of the subsidiary. Cash used towards financing
activities has been reduced from $ 959 million to $ 300 million. The reduction was
due to payment made towards bilateral bank debt has been reduced to $ 320 million in
2017 as compared to $ 3,110 million of 2016.
 AngloGold Ashanti Ltd - cash used for investing activities has been increased from $
702 million to $ 862 million. The increased amount was contributed towards
projected capital and acquiring investment. Cash used towards financing activities has
been reduced from $ 763 million to $ 148 million. The reduction was due to payment
made towards borrowing has been reduced to $ 767 million in 2017 as compared to $
1,333 million of 2016.
 Northern Star Resources Ltd - cash used for investing activities has been increased
from $ 189723 thousand to $ 204,388 thousand. The increased amount was
contributed towards payment of plant, property and equipment and disposal of the
business. Cash used towards financing activities has been increased from $ 45,714
thousand to $ 66,623 thousand. The increase was due to payment made to
shareholders as dividends.
(v) Comparative analysis
Newcrest Mining Ltd –

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2017 ($m) 2016 ($m) 2015 ($m)
-1,500.00
-1,000.00
-500.00
-
500.00
1,000.00
1,500.00
2,000.00
Net cash used in
operating activiti
es
Net cash (used in
) / provided by in
vesting activities
Net cash provide
d by (used in) fin
ancing activities
Cash generated through operating activities do not have any particular trend. Net cash
used also do not have any particular trend. However, the cash used for financing activities of
the entity are in reducing trend (Warren and Jones 2018).
AngloGold Ashanti Ltd –

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2017 ($m) 2016 ($m) 2015 ($m)
-1,500.00
-1,000.00
-500.00
-
500.00
1,000.00
1,500.00
Net cash used i
n operating act
ivities
Net cash (used
in) / provided b
y investing acti
vities
Net cash provi
ded by (used in
) financing acti
vities
Cash generated through operating activities do not have any particular trend.
However, the cash used for financing activities of the entity are in reducing trend and cash
used for investing activities are in increasing trend.
Northern Star Resources Ltd –

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2017 ($'000) 2016 ($'000) 2015 ($'000)
-300,000.00
-200,000.00
-100,000.00
-
100,000.00
200,000.00
300,000.00
400,000.00
500,000.00
Net cash used in opera
ting activities
Net cash (used in) / pr
ovided by investing a
ctivities
Net cash provided by
(used in) financing act
ivities
Cash generated through operating activities do not have any particular trend.
However, the cash used for financing activities as well as cash used for investing activities of
the entity are in increasing trend (Chang et al. 2014).
(vi) Comparative analysis selected for explaining insights
Looking for the insights of all the 3 companies regarding the pattern of cash flows it
can be commented upon that all the companies are generating cash through operating
activities. Further, all the companies are using cash for financing activities as well as
investing activities and not generating any cash from there.
Other comprehensive income statement
(vii) Reported items under other comprehensive income (OCI)
Newcrest Mining Ltd – items reported in the OCI statement are –
 Items those are likely to be reclassified in profit and loss statement – it includes the
cash flow hedges, investments that is net gain from financial assets available for sale
that is transferred to income statement on disposal of the investment. It further

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includes the foreign currency translation where the exchange losses or gains from
translation of the foreign operations after adjusting the hedge amount (Jordan and
Clark 2014).
AngloGold Ashanti Ltd – items reported in the OCI statement are –
 Items those are likely to be reclassified in profit and loss statement – it includes
Northern Star Resources Ltd – items reported in the OCI statement are –
 Items those are likely to be reclassified in profit and loss statement – it includes the
exchange differences on the translation of the foreign operations, net gains or loss on
the financial assets those are available for sale, release on the disposal of the available
for the sale financial assets.
(viii) Why items of OCI are not reported in the profit and loss statement
Some of the items those are included in the other comprehensive income statements
cannot be reported under the income statement as they are of extra-ordinary nature. For
instance, cash flow hedges, investments those are held for sale, financial assets held for sale,
exchange difference from exchange translation and tax recognition if included in the profit
and loss statement it will either overstate or understate the profit or loss in the profit and loss
statement. Hence, the items included in the OCI are not included in the profit and loss
statement.
(ix) Comparative analysis of items reported under OCI
Looking into the OCI statement of all 3 entities selected above it can be commented
that the OCI income of Newcrest Minerals Ltd have been increased from $ 194 million to $
534 million. In case of AngloGold Ashanti Ltd OCI statement represents that the income
from 2016 amounting to $ 267 million has reached to loss amounting to $ 17 million in 2017.

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The loss was due to the loss reported in the profit and loss statement of the company for the
year 2017. Further, in case of North Star the OCI for the year 2017 has increased to $ 1,580
thousand as compared to $ 773 thousands for 2016. The increase was due to changes in fair
value of financial asset available for sale (Khan and Bradbury 2016).
(x) Including comprehensive income for evaluating the manager’s performance
Various items like cash flow hedges, investments those are held for sale, financial
assets held for sale, exchange difference from exchange translation and tax recognition those
are included in OCI determines manager’s ability with regard to planning and estimation of
the values of the liabilities as well as assets. These items are of great importance as it can
benefits the entity while meeting the future obligation. Therefore, it is a crucial item that must
be used for analysing the performance of the manager (Weygandt, Kimmel and Kieso 2015).
Accounting for corporate income tax
(xi) Reported tax expenses for 2017
Newcrest Mining Ltd – $ 164 million
AngloGold Ashanti Ltd – $ 108 million
Northern Star Resources Ltd – $ 79,607,000
(xii) Effective rate of tax
Effective tax rate is calculated as –
Effective tax rate = Income tax expense / Earning before tax
Newcrest Mining Ltd – $ 164 million / $ - 63 million = 260.32%
AngloGold Ashanti Ltd – $ 108 million / $ 483 million = 22.36%

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Northern Star Resources Ltd – $ 79,607,000 / 268,504,000 = 29.65%
(xiii) Deferred tax assets or deferred tax liabilities
Newcrest Mining Ltd – the entity did not report any amount under deferred tax assets.
However, deferred tax liabilities amounted to $ 1087 million in
AngloGold Ashanti Ltd – deferred tax assets amounted to $ 4 million in 2017 and deferred
tax liabilities amounted to $ 363 million in 2017
Northern Star Resources Ltd – the entity did not report any amount under deferred tax assets.
However, deferred tax liabilities amounted to $ 49,346 thousand in 2017 (Titman, Keown and
Martin 2017).
DTA or DTL reported by the company for reporting the temporary timing difference
in that is generated through timing difference in the paid tax and accrued tax. However, the
company records the DTA or DTL only when the company is certain that the future profit
will be available with the company for adjusting the temporary differences (Narotzki 2017).
(xiv) Increase or decrease in deferred tax assets or liabilities reported by the
entities
Newcrest Mining Ltd – deferred tax liabilities amounted to $ 1087 million in 2017 as
compared to $ 948 million in 2016.
AngloGold Ashanti Ltd – deferred tax assets amounted to $ 4 million in 2017 as well as 2016
both. Deferred tax liabilities amounted to $ 363 million in 2017 as compared to $ 496 million
in 2016.
Northern Star Resources Ltd –deferred tax liabilities amounted to $ 49,346 thousand in 2017
as compared to $ 36,569 thousand in 2016.

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(xv) Cash tax
Cash tax of the entity is calculated through adjusting the changes in the deferred tax
assets and deferred tax liabilities with the book tax. Book tax is the tax expenses reported by
the company under the profit and loss statement of the entity (Waddock 2017). Cash taxes of
the companies selected above are as follows –
(xvi) Rate of cash tax
Cash tax rate is computed through dividing the amount of cash tax by the amount of
EBITDA that is amount of earnings before interest, tax and amortisation. Details for the cash
tax rate for the selected entities are as below –
It can be stated from the above table that as the book tax for AngloGold Ashanti Ltd
is in negative the cash tax rate is not applicable. Further, it can be identified that the cash tax
rate for Newcrest Mining Ltd is highest at 53.33% and the cash tax rate for Northern Star
Resources Ltd (Marshall 2016).

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(xvii) Difference of cash tax rate from the book tax rate
There is difference among the cash tax rate and book tax rate as the book tax is the
rate that is recorded in entity’s financial statement. On the other hand, Cash tax rate is the rate
at which the entity pays tax to federal government. This amount is computed on income
reported in tax return filed by the entity. Hence, there is a difference in cash tax rate and
book tax rate (Maaloul and Zéghal 2015).
Conclusion
From the above interpretation ad details provided it can be concluded that various
items of financial items reported in financial items like equities, liabilities, cash flows, taxes
and other comprehensive income statement. All the items have been properly reported by all
the companies in their financial statements. Other comprehensive statement includes the
items those cannot be reported in the income statement. Further, the cash flow statement of
all the entities are segregated into operating activities segment, investing activities segment
and financing activities segment.

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Reference
AngloGold Ashanti. 2019. Home - AngloGold Ashanti. [online] Available at:
https://www.anglogoldashanti.com/ [Accessed 29 Jan. 2019].
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allocation of internal cash flow. The Review of Financial Studies, 27(12), 3628-3657.
Jordan, C. E., and Clark, S. J. 2014. Reporting preferences under the comprehensive income
standard: Examining its use in practice. The CPA Journal, 84(5), 34.
Khan, S., and Bradbury, M. E. 2016. The volatility of comprehensive income and its
association with market risk. Accounting and Finance, 56(3), 727-748.
Laux, R. C. 2013. The association between deferred tax assets and liabilities and future tax
payments. The Accounting Review, 88(4), 1357-1383.
Maaloul, A. and Zéghal, D., 2015. Financial statement informativeness and intellectual
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Marshall, S., 2016. Fair trade, corporate accountability and beyond: Experiments in
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Narotzki, D., 2017. Corporate Social Responsibility and Taxation: A Chance to Develop the
Theory.

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Newcrest Mining Limited, 2019 . [online] http://www.adenergy.com.au/, Newcrest.com.au.
Available at: http://www.newcrest.com.au/ [Accessed 29 Jan. 2019].
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29 Jan. 2019].
Pavlović, M., and Bogdanović, J. 2013. Cash flow statement. Škola biznisa, (3-4), 129-147.
Reid, W., and Myddelton, D. R. 2017. The meaning of company accounts. Routledge.
Sarfaty, G.A., 2015. Measuring corporate accountability through global indicators. The Quiet
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Sethi, S., 2016. Globalization and self-regulation: The crucial role that corporate codes of
conduct play in global business. Springer.
Titman, S., Keown, A.J. and Martin, J.D., 2017. Financial management: Principles and
applications. Pearson.
Waddock, S., 2017. The difference makers: How social and institutional entrepreneurs
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Warren, C.S. and Jones, J., 2018. Corporate financial accounting. Cengage Learning.
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Weygandt, J.J., Kimmel, P.D. and Kieso, D.E., 2015. Financial and managerial accounting.
John Wiley and Sons.

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Appendix
Northern Star Resources Limited

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AngloGold Ashanti ltd

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Newcrest mining ltd –

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