Corporate Accounting: Analysis of Finance Statements of ASX Listed Entities

Running head: CORPORATE ACCOUNTING
Corporate accounting
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CORPORATE ACCOUNTING
Executive summary
Aims of the report is to analyse the finance statement of 3 ASX listed entities and the way
they reported various items like assets, liabilities, other comprehensive income and cash flow
statement. For this report 3 companies that will be taken into consideration are Altura
Mining, Rio Tinto and BHP Billiton. The report will represent the amount of changes for
assets, liabilities and cash flows. It will further focus on corporate income tax and will
compute the cash tax rate of the companies.

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Table of Contents
Introduction................................................................................................................................3
Equity and liabilities..................................................................................................................3
(i) Equity items....................................................................................................................3
(ii) Liability items................................................................................................................6
(iii) Comparative analysis of debt and equity position.........................................................9
Cash flow statement.................................................................................................................10
(iv) Listed cash flow items...............................................................................................10
(v) Comparative analysis.................................................................................................11
(vi) Comparative analysis selected for explaining insights..............................................14
Other comprehensive income statement..................................................................................14
(vii) Reported items under other comprehensive income (OCI).......................................14
(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..........16
Accounting for corporate income tax.......................................................................................17
(xi) Tax expenses recorded in financial statement of 2017..............................................17
(xii) Effective rate of tax...................................................................................................17
(xiii) Deferred tax assets or deferred tax liabilities............................................................17
(xiv) Increase or decrease in deferred tax assets or liabilities reported by the entities......18

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(xv) Cash tax.....................................................................................................................18
(xvi) Rate of cash tax.........................................................................................................19
(xvii) Difference of cash tax rate from the book tax rate....................................................19
Conclusion................................................................................................................................19
Reference..................................................................................................................................21

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Introduction
Altura Mining is an ASX listed company based in Perth, Australia and carries on the
business of lithium. It is engaged in exploration and development of coal mining and
minerals. The company is fulfilling the increasing demand of raw material required for
manufacturing lithium ion batteries. It is focussed on developing and constructing its 100%
owned lithium project Pilgangoora located in Pilbara, Western Australia (Alturamining.com,
2018).
Incorporated on 30th March 1962, Rio Tinto became the leading mining and metal
company in Australia. It’s major business is finding, mining and processing of mineral
resources. It has various segments like Iron Ore, Aluminium, minerals and energy, Diamonds
and copper. The company assists in meeting the society’s requirement through different
researches and innovations and help the world to grow (Riotinto.com, 2018).
Established during 2001 through merging of Broken Hill, Billiton and Proprietary,
BHP Billiton became the biggest mining and global resources organization. It is 7th biggest
producer in world for aluminium and considered as the largest producer of manganese,
copper, nickel, aluminium, iron ore, titanium, uranium and silver (BHP, 2018).
Equity and liabilities
(i) Equity items
Altura Mining – equity items listed in the balance sheet of the company are as follows –
 Contributed equity – contributed equity that is also known as paid in capital is the
component of total equity recognised in the balance sheet of the company. Another
way of reporting the contributed equity is to record it under the head shareholder’s

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equity as a separate account. It represents the contributed amount of shareholders for
share of ownership in the company (Titman, Keown & Martin, 2017).
 Reserves – reserve is considered as an equity component that does not consider the
part of basis share capital. It represents the surplus accumulated through various
sources including revaluation reserve that is upward revaluation of the assets or
issuance of share at premium (Maaloul & Zéghal, 2015).
 Accumulated loss – generally the amount of retained earnings that is the accumulated
earnings are used for distributing dividend. If the account balances of accumulated
earning shows negative figure the amount of retained earnings will also represent
negative balance that is reported as accumulated loss.
Changes in equity for the company is as follows –
Issued capital amount went up owing to the contribution of equity and changes in the
amount of accumulated losses were owing to the distribution from the retained earnings.
Rio Tinto – equity items listed in the balance sheet of the company are as follows –
 Share capital – fund raised through share issuance in consideration for cash or other
form is known as share capital. In investing into the company through purchasing the
shares the shareholders becomes the part owner of the company. it is considered as
the long term source of raising funds.