Analysis of Taxation in GBST Holdings Limited

HI 5020- Corporate Accounting
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Table of Contents
Introduction......................................................................................................................................3
i) From your firm’s 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........................................................................................4
ii) What is your firm’s tax expense in its latest financial statements?.........................................5
iii) Is this figure the same as the company tax rate times your firm’s accounting income?
Explain why this is, or is not, the case for your firm...................................................................6
iv) Comment on deferred tax assets/liabilities that are reported on the balance sheet
articulating the possible reasons why they have been recorded..................................................7
v) Is there any a current tax asset or income tax payable recorded by your company? Why is
the income tax payable not the same as income tax expense?....................................................8
vi) 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?................................................9
vii) What do you find interesting, confusing, surprising or difficult to understand about the
treatment of tax in your firm’s financial statements? What new insights, if any, have you
gained about how companies account for income tax as a result of examining your firm’s tax
expense in its accounts?.............................................................................................................10
Conclusion.....................................................................................................................................11
References......................................................................................................................................12
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Introduction
In any company there are various aspects which are to be noted and most important among them
is accounting. Under this it will be needed that all the transactions which are taking place shall be
recorded in most appropriate manner. It shall be noted that all the policies and procedure which
have been formulated shall be followed so that it will be possible to attain the objectives which
have been set. In this report the various points in respect of taxation will be used in context of
GBST holdings limited. By the help of this, understanding will be developed that whether
company is complying with all the requirements in best manner. It is required that understanding
shall be obtained about all the policies and that will be made possible with the help of the report
presented here under.
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i) From your firm’s 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.
In the statement of financial position, there are various elements which are incorporated and one
of them is equity. Under this several components are included and the main which have been
used in the given organization are as follows:
Issued capital: Under this, the capital which is issued by the company in form of shares is
included. By the help of this funds are raised and all the shareholders will be receiving the right
with them by which they can participate in the meetings and vote in respect of any matter. The
total issued capital in given case is recognized at $39473. The change which has been noted
under this is due to the shares which are issued in relation to performance rights (Baker & Xuan,
2016). All of them will be entitled to dividends which are declared by the company.
Reserves: In organization, several operations are carried out and in respect of some funds are
kept aside. So this amount will be known as a reserve and they are prepared for a particular task.
The total reserves which are made under the current case are ($4153). This amount can be
bifurcated in two reserves which are equity remuneration reserve of $2015 and foreign currency
translation of ($4358).
Retained earnings: When a company does not distribute all of its earnings and saves some of
the amounts to be used in the coming period will be known as retained earnings (Maag, 2015).
They can be used for any purpose whenever the need arises. The total amount which is held by
GBST in this regard is $29563 (GBST Holdings Limited, 2017).
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