Corporate Accounting Report
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Added on 2020-05-28
Corporate Accounting Report
Added on 2020-05-28
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Running head: CORPORATE ACCOUNTINGCorporate AccountingName of the Student:Name of the University:Authors Note:
CORPORATE ACCOUNTING1Table of ContentsQuestion I.........................................................................................................................................2Question II.......................................................................................................................................3Question III......................................................................................................................................4Question IV......................................................................................................................................5Question V.......................................................................................................................................6Question VI......................................................................................................................................7Question VII....................................................................................................................................8References......................................................................................................................................10Appendix........................................................................................................................................12
CORPORATE ACCOUNTING2Question IThe companies are observed to have three important features in the balance sheet andequity is of these components. There exists no exception to the same in case of QantmIntellectual Property Limited. Based on the year 2017 balance sheet of the firm there exist cetinkey components including reserves, retained earnings and equity including the issued capital.Issued capital can be observed as equity present in the business firms (Armstrong, Blouin,Jagolinzerand Larcker 2015). Calculation of the issued capital is performed by the number ofshares along with outstanding shares by par value shares. Observing the annual report of QantmIntellectual Property Limited a boost within the capital issue is present in the year 2017 incontrast to 2016 that is $ 302,562,000 in 2017 from $ 235,073,000 in 2016. The company provided explanation concerning certain key areas which can effectivelyproduce tax expenses difference. In that table, the firm has conducted all necessary calculationsand another important tax expense differences in income and cash flow statement. The keyfactors present in issues capital are ordinary shares issue, issue of shares cost and the income taxrelated with issue of shares. Certain components those are present in the equity of theorganization includes reserves. Within increased consideration to the theory of financialaccounting, reserves can be explained as a part of the company’s equity (Atanasov and Black2016). This can be revealed as additional amount devoid of basic share capital. The company’s
CORPORATE ACCOUNTING3current annual report evidenced a boost in equity reserves for in the year 2017 that is different in2016 that is. In this organization there are key components of equity reserve which encompassequity reserve for considerable employee benefit, reserve relied on foreign currency translationalong with hedging reserve. One major aspect in Qantm Intellectual Property Limited includes retained earnings. Thisexplains total profits and losses of the firm since its emergence that lessened by the dividend paidto all the shareholders (Cheng, Ioannouand Serafeim 2014). The recent yearly report of the firmevidenced that the company attained retained earningsof approximately in the year 2017 incomparison to year 2016 that has approximately. A good position of retained earnings explainsthat the organization has increased profits in contrast to the losses. The aspects within thecompany’s retained earnings encompass net profit linked with the people associated with thefirm, dividends paid to offer with the effect of restatement. These components come under thecompany’s equity reserve (Christensen et al.2015). Question IIIn the organizations, there are numerous costs that are deemed to encompass selling andadministrative expenses with a lot of expense deemed to be tax expense. Additionally, taxexpense is considered to be a huge liability for the firm which is an aspect of state, federal andmunicipal government belonging to the country (Damodaran 2016). Tax expense calculation canbe carried out through necessary business tax before income with explaining important elementsthat includes tax assets and liabilities with non-deductible components. Considering QantmIntellectual Property Limited’s yearly report the company has indicated $ 77,513,000 in 2017and $ 66,593,100 in 2016 as their profit from regular income tax operations (Dyreng et al.2017).
CORPORATE ACCOUNTING4Based on Australian Tax Law rules the business tax rate for the countries within Australia isdeemed to be 35% (Dowling 2014). Considering this rate of tax, the tax expenses of thisorganization is $ 35,576,000 in 2017 and $ 26,570,000 in 2016. It is elaborated that there is agradual boost in tax expenses of the firm because of enhancement in the company’s income forthe year 2017 in comparison to the year 2016. Question IIIIn accordance with above elucidation, it is explained that Qantm Intellectual PropertyLimited attained profits approximately in the year 2017 and in the year 2016 from its regularbusiness conducts before changes in income tax. In addition, the recent yearly report of thebusiness signifies that it has a tax rate of 35% for the financial year 2017 and 2016 (Laux 2013).Considering the same rate, total expenses of income tax of the business is observed being $76,284,000 ($ 67,613,000*35%) in 2017 and $ 23,975,000 ($ 56,583,000*35%) in 2016.Accordingly, the original tax expense of the company in the years 2017 and 2016 remained and.An increased variation might be seen in tax expense rather than attaining 35% of tax rate. There are some partial aspects that is encompassed or excluded within the preliminarycosts of the overall tax and these are taken into account as reasons for differences in tax expenses(Piketty and Saez 2013). In Qantm Intellectual Property Limited there are five components that
CORPORATE ACCOUNTING5are deemed to have effect on tax expenses of the organization. The first aspect includes expensesthose are not deductible for determining the profits that are taxable. There are too many expenses in the organization that cannot be decreased from theincome related with the company. Because of the same, $ 679,000 and $ 738,000 considered inthe years from 2017 and the year 2016 considerably (Rego and Wilson 2012). The second aspectis deemed to be the presence of different rates of tax of the subsidiaries of the organizationhaving the tax rate of 35% in one nation and 35% in another nation. Because of these variationsin the rate of tax $ 15000 and $ 16000 was decreased from the organizations expense of taxwithin the year 2016. There are some factors that can be added in the tax expenses of theorganization and due to the same thing and was added. The final aspect encompasses thepresence of non-accessible income for a part of income are not observed to be analyzed in thetaxation and due to this is added with the total expenses of tax (Qantm Intellectual PropertyLimited, 2017). Question IVDeferred tax and liabilities assets are considered being important considering theorganization’s tax expenses. Deferred tax assets are observed to have a situation in whichcompanies overpay taxes and make previous tax payments within the financial assets. Moreover,deferred income tax liability explains a situation where there are variations in the carrying valueof tax and profit of the company (Saunders and Cornett 2012). Considering case of QantmIntellectual Property Limited, this is evident that the company has reported its deferred taxliability with the assets in yearly annual report. This signifies the organization has deferred taxassets of approximately $ 17,657,000 in 2017 and $ 6,394,000 in 2016(Dyreng et al. 2017). In
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