Corporate Accounting Analysis of BCI Limited and Boral Limited

Running head: CORPORATE ACCOUNTING 1
Corporate Accounting
Author’s Name
Institutional Affiliation
Date

CORPORATE ACCOUNTING 2
Executive Summary
The paper presented analysis of BCI Limited and Boral Limited. This is based on their latest
financial statements. From the analysis, BCI Limited is found to be in a better position in
terms of cash flow generations. In addition, based on the analysis, it can be stated that Boral
Limited was more effective in settling its tax obligations in comparison to BCI Limited.
Additionally, it can be concluded that BCI Limited was in a better position to generate high
cash flow both from its operations, investment as well as from its financing operations in
comparison to Boral Limited. This is based on the fact that despite the decreasing trend in
BCI Limited cash from operations, the company had relatively high cash inflow from these
activities unlike its counterpart.

CORPORATE ACCOUNTING 3
Table of Contents
Executive Summary...............................................................................................................................2
Introduction...........................................................................................................................................3
OWNERS EQUITY..............................................................................................................................4
Item Reported on BCI and Boral Limited Latest Financial Statements.............................................4
Debt and Equity Position of Both BCI Limited and Boral Limited...................................................5
CASH FLOWS STATEMENT.............................................................................................................6
Item Reported in the Cash Flows Statement of BCI Limited and Boral Limited...............................6
Analysis of BCI Limited and Boral Limited Based on the Three Categories of the Cash Flows.....10
Comparative Analysis of BCI Limited and Boral Limited...............................................................10
OTHER COMPREHENSIVE INCOME STATEMENT.....................................................................10
Items Reported in BCI Limited and Boral Limited Statements of the Other Comprehensive Income
.........................................................................................................................................................10
Why the items are not reported in the Profit/Loss Statements.........................................................11
How inclusion of the items could affect profit attributable to shareholders.....................................12
Whether the other comprehensive income ought to be included in evaluation of managers’
performance.....................................................................................................................................12
ACCOUNTING FOR CROPORATE INCOME TAX........................................................................12
The Tax Expenses in BCI and Boral Limited Financial Statements................................................12
Effective Tax Rate for the Two Companies.....................................................................................12
Comments on the Deferred Tax Assets/Liabilities...........................................................................13
Whether There Was an Increase or Decrease in Deferred Tax Assets or Liabilities........................13
Cash Tax Amount for Both Companies...........................................................................................13
Cash Tax Rate for Both Companies.................................................................................................14
The reason behind cash tax rate being different from book tax rate.................................................14
Conclusion...........................................................................................................................................14
References...........................................................................................................................................15
Introduction

CORPORATE ACCOUNTING 4
BCI formerly the BC Iron Ltd is the iron ore development and mining firm listed in
ASX. Its principal development activities comprise of exploration and development of the
mineral projects, mostly on the iron ore deposits within Pilbara, west of Australia (BCI
Limited 2017). It key strategies are maximizing value from the iron ore, creating presence in
the base and gold metals as well as becoming a key influential player in the country both in
industrial minerals and agricultural sector. Iron is the firm’s chief focus, with chief assets of
Buckland and Iron Valley offering complementary mix of the current growth and earnings
potential. On the other hand, Boral Limited is the international construction and building
material firm whose headquarter is in Sydney (Investsmart 2018). Its core operations are
construction materials and cement within Australia, bricks and roof tiles within US and
Australia as well as plasterboard within Asia and Australia.
OWNERS EQUITY
Item Reported on BCI and Boral Limited Latest Financial Statements
Based on BCI Ltd statement of the owner’s equity there were a number of items
reported. These items include contributed equity, reserves, and accumulated losses. The
accumulated losses for the company comprised of the balance at the 30th June 2016, which
was 165,005 million which was an increase from 79,955 in 2015. Another items included in
this section was the profit generated within the year of around 5,669 million which yielded to
comprehensive income of around 5,669 million (BCI Limited 2017). On overall, accumulated
losses for the company in 2017 was 165,005 million a decrease from 170,674 million
reported in 2017. Further, contributed equity items comprised of share issued of around
21,188 million and performance rights converted of around 80 million. On overall, the
contributed equity for the company was 266,735 million in 2017 which was an increase from
the amount reported in the previous year of around 242,467 million. It reserves comprised of
performance rights converted of around -80 million, and share based payments of around 623