Corporate Accounting Analysis for Cooper Energy Limited

HI5020- Corporate accounting
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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?.........................................7
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...................................................................8
4. Comment on deferred tax assets/liabilities that are reported in the balance sheet articulating
the possible reasons why they have been recorded......................................................................9
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?.........................................................11
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?..............................................12
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?.............................................................................................................13
Conclusion:....................................................................................................................................15
References:....................................................................................................................................16
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Introduction:
The following report is related to corporate accounting and the concepts related to this
accounting. In order to understand the basic concepts of corporate accounting a company has
been chosen named Cooper Energy limited. The company has been engaged in finding,
developing and commercializing oil and gas. The financial statement of the company will be
recognized and analysed for the purpose of corporate governance. The information will be
presented about the tax liability of the company and analysis will be made about the deferred tax
asset and liability created by the company in the concerned year. An explanation will be given of
the understanding created for the tax liability of the company.
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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.
As per the latest annual report extracted for the company for the year ended 2017, the equity
portion of the company includes items such as contributed equity with a share of $343161000,
reserves of $6777000 and accumulated losses of the company amounting to ($64891000).
Therefore the total equity of the company comes out to be $285047000 (Cooper Energy Limited,
2017). The items of the equity are explained in brief as below:
 Equity share capital – The equity share capital of the company represents the funds raised
by the company in exchange of the ordinary as well as preferred shares. The equity
capital of the company can fluctuate over the number of years based on the amount of
share capital issued by the company. However they bear a kind of cost of capital to be
incurred in the form of dividend and expectation of the shareholders of the company.
 Reserves – The reserves of the company represents the retained profits of the company
which have not been distributed to the shareholders of the company and can be utilized
for future investment and capital purposes. There are certain rules and regulations as
prescribe d by the laws applicable to the company for determining the amount of reserves
that can be transferred for the net profit achieved by the company. The transfer to various
reserves should be carefully analysed as the decision will directly influence the wealth of
the shareholders of the company (Beekes, et. al., 2015).
 Accumulated losses – The losses of the previous year’s which have been carried forward
for setting off from the future earnings are defined as accumulated losses. These losses of
the previous year’s results in decrease of the equity portion of the company. The
accumulated losses should be recognized after proper investigation and they should be
adequately presented in the annual reports and financial statements of the company.
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