Corporate Accounting: Analysis of Boral Limited and Adelaide Brighton Limited | Desklib

RUNNING HEAD: CORPORATE ACCOUNTING
[Document title]

CORPORATE ACCOUNTING 1
EXECUTIVE SUMMARY
The purpose of this assignment is to evaluate the complete understanding of owners’
equity, cash flow statement covering all the three activities, other comprehensive income
statement and the accounting for corporate income tax. In this assignment, companies
selected are Boral Limited and Adelaide Brighton limited. Both of these companies are
listed in Australian stock market and belongs to materials industry with ASX codes are BLD
and ABC respectively. Adelaide Brighton limited is a producer of lime and construction
materials in Australia. It produces and distributes lime, concrete, clinker, cement and concrete
products. Boral Limited also produces materials related to construction and building products
across world. For the complete understanding of the above topics, comparative analysis of
debt and equity portion, cash flow statement and the comprehensive income statement of both
selected companies for previous three years (2017, 2016 and 2015) are computed. Further
this task also reports deferred tax liabilities or assets given in the financial statements. In
addition to this, cash tax rate along with cash tax amount is also computed. At the end, this
report ends with stating conclusions about both companies and references.

CORPORATE ACCOUNTING 2
Contents
INTRODUCTION.....................................................................................................................................3
Owners’ Equity..................................................................................................................................4
Cash Flow Statement:........................................................................................................................7
Other comprehensive income statement:.......................................................................................17
Accounting for corporate income tax:.............................................................................................20
CONCLUSION.......................................................................................................................................24
REFERENCES........................................................................................................................................25

CORPORATE ACCOUNTING 3
INTRODUCTION
BORAL LIMITED
Boral Limited produces materials and products related to construction and related to
buildings in Australia. The Boral limited is listed in Australian Stock market and the ASX
code is ASX: BLD (AX, 2018). The core drive of the company is to produces and sells
supreme and finest eminence of products and materials across globe. It sells the materials and
products in Middle East, Asia, Australia and North America (Boral Limited, 2018). The
company encourages safe and friendly working environment for the employees. Also analyse
that the company has employed around 11499 people which includes 18% of women
workforce. The key people are Mike Kane is CEO whereas Dr Brian Clark is the chairman.
The foremost agenda of the company is to serve better value to the owners of the company.
ADELAIDE BRIGHTON LIMITED
Adelaide Brighton Limited is also a producer of construction materials. It mainly operates in
Australia. It is listed in Australian Stock market and the ASX code is ASX: ABC (ASX,
2018). The core business activities of a company are to produce, sells, imports distribute
concrete, clinker, construction, lime and cement. Further the company emboldens safe,
morals and welcoming working atmosphere for the employees. Also analyse that the
company has employed around 1600 people in Australia. Company’s main aim is to
maximise the shareholders’ value. Further in order to meet the customer’s satisfaction,
company offer turnkey results in all the business areas. The chief executive officer is Martin
Brydon (Adelaide Brighton limited; 2017, 2016).
In this task both entities “Boral Limited” and “Adelaide Brighton limited” are taken into
account. This report covers Complete understanding of each item of equity and cash flow
items. In addition to this, comparative analysis of debt and equity portion, cash flow

CORPORATE ACCOUNTING 4
statement comprising three types of cash flows (operating activities, investing activities and
financing activities) and other comprehensive income statement for three financial years that
is 2017, 2016 and 2015 are computed. Moreover, effective tax rate of both companies is
computed with the help of given tax expense in financial statements. Deferred tax
assets/liabilities are also recorded. Also cash tax rate is computed along with cash tax
amount. At last, this task is ended up with conclusions and references.
Owners’ Equity
i. Items of Equity:
Adelaide Brighton limited:
 Adelaide Limited paid dividends for $ 156 million in financial year 2017
whereas in 2016 the dividends paid was $ 178.5 million. In other words, the
dividend was decreased by 12.60%.
 Profit for the period was included in equity calculation. Thus, as per the
annual report, net profit reported by the company is $ 182.1 million in 2017
whereas in 2016 net profit was reported $ 186.2 million which means the
profit has declined by 2.2% because of increment in administration costs, cost
of sales and freight and distribution costs (Adelaide Brighton limited, 2017,
2016).
 Other comprehensive income is also a part of statement of changes in equity.
The Adelaide limited has reported $ 183.8 million in FY 2017 whereas in FY
2016 the same was reported with an amount $ 187.4 million. The decrement is
due to less net profit in 2017 as compared to 2016 (Adelaide Brighton limited,
2017, 2016).
Boral Limited:

CORPORATE ACCOUNTING 5
 According to the annual report 2017, it was observed that Boral limited had
recognized $ 296.9 million as net profit whereas in financial year 2016, net
profit was recognized $ 256 million. The reason for such increment in net
profit in 2017 was due to increase in sales revenue by 7.92% in comparison to
2016.
 Taken into consideration total comprehensive income for the period 2017 and
2016 it was observed that in 2017 the same was reported with $ 174.3 million
whereas in 2016 it was reported $ 251.7 million. This was resulted the
decrement by 44.40% from 2016. The main reason was due to negative
amount of translation of net assets of overseas entities (Boral Limited, 2017;
2016).
 The dividend paid is included in the statement of changes in equity. From the
annual report, it is observed that dividend paid by the company in 2017 was $
226.2 million whereas in 2016 dividend paid was $ 154.2 million. The reason
was due to increment in net profit recognized by the company.
ii. Comparative Analysis:
Adelaide Brighton Limited
Particulars
2017
($m)
2016
($m)
$
change
%
change
LIABILITIES
Current Liabilities
Trade and other payables 145.8 117 28.8 25%
Borrowings 0.3 0.4 -0.1 -25%
current tax liabilities 9.8 15.4 -5.6 -36%
Provisions 33.8 31.9 1.9 6%