Corporate Accounting Analysis at Woolworths Limited

Corporate Accounting
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Table of Contents
Introduction:...............................................................................................................................3
1. 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
2. What is your firm’s tax expense in its latest financial statements?....................................6
3. 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.............................................................7
4. Comment on deferred tax assets/liabilities that are reported in the balance sheet
articulating the possible reasons why they have been recorded.............................................8
5. Is there any current tax assets or income tax payable recorded by your company? Why is
the income tax payable not the same as income tax expense?.............................................10
6. 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?.........................................11
7. 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?.................................................................................................12
Conclusion:..............................................................................................................................13
References................................................................................................................................14
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Introduction:
This report provides the discussion regarding the concepts of corporate accounting in
consideration with the Woolworths Limited. The working of the company is necessitated in
accordance with the supermarket operations. This report also helps in providing the effective
understanding regarding the tax expenses incurred by the business. To develop the effective
understanding the effective analysis of the financial statements provided in the business are
analysed and evaluated in this report. All the concepts related to the deferred tax liability,
equity, etc. are analysed by the business of the current year. The effective comments in
relation to the interesting, confusing or surprising facts in the taxation are also provided in
this report.
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1. 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.
According to the latest annual report of the Woolworths limited for the year ended 2017, the
equity of the organisation includes the items such as contributed equity, reserves, retained
earnings. The share of contributing equity is $5615million. The share of the reserves is the
$113.8million and the share of retained earnings is $3,797.2million. The total non-controlling
interests are $350.1million. Hence the total portion which is available for the equity is $
9,876.1million. The understanding regarding the items of equity is provided thereunder:
 Equity share capital: The equity share capital of the corporate signifies the risk
capital which is staked by the owners with the consideration of the purchase of the
business common stock. The capital of the business keeps on fluctuating with the
amount recorded as the share capital. The ordinary shares represented by the business
do not comprise of any of the par value and hence the shareholders are eligible to vote
(Warren and Jones, 2018).
 Reserves: The reserves comprise of the retained profits of the business which is not
distributed to the shareholders and can be used in the future investments. These are
used in the future by the company for the purchase of the fixed assets or to pay the
legal statements, etc.
 Retained earnings: Retained earnings represent the percentage of the net earnings
which is not paid as a dividend but reserved by the business to be invested in its core
trade.
 Non-controlling interest: It signifies the portion represented by the equity of
business and which is related to its ownership in the subsidiary. It is not attributable to
the parent company (Warren and Jones, 2018).
The statement of changes in equity is provided thereunder:
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