Corporate Accounting Assesment Analysis

Running head: CORPORATE ACCOUNTING
Corporate accounting
Name of the student
Name of the university
Author’s note

CORPORATE ACCOUNTING1
Executive Summary
The project aims at highlighting the major elements of tax which are shown in the
financial statements of a company. It takes Woolworths corporation ltd. as the chosen
company for conducting the study. It tries to study the impact of tax income and the tax
expense in the accounting statements. It concludes that beyond the income tax
calculated and the accounting profit of the firm, there are several significant items of
interest for a financial analyst. It concludes that the preparation of the balance sheet
and other financial statements needs the accurate calculation of tax related items
following the concerning accounting standards.

CORPORATE ACCOUNTING2
Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
Question 1....................................................................................................................................3
Question 2....................................................................................................................................4
Question 3....................................................................................................................................5
Question 4....................................................................................................................................6
Question 5....................................................................................................................................7
Question 6....................................................................................................................................8
Question 7....................................................................................................................................9
Question 8..................................................................................................................................11
Question 9..................................................................................................................................12
Conclusion.....................................................................................................................................13
References......................................................................................................................................14

CORPORATE ACCOUNTING3
Introduction
The Accounting standard termed as AS 22 provides explanations concerning the
accounting for taxes on income. The objective of the standard is to provide details of the
accounting treatments for taxes on income. Taxes charged on income of any business
is a significant concept and is used in the preparation of financial statements like
statements of profit and loss account and the balance sheet.
Discussion
Question 1
Accounting profit – It is the net income earned by the business after adjusting all the
explicit costs of the firm’s total revenue as per the generally accepted accounting
principles. The cost which is included are cost of labour, raw materials cost, production
and distribution cost.
Taxable profit – It is the amount of profit that is taxable or the profit on which income
tax is liable.
Temporary difference- a temporary difference is the difference in amount between the
carrying value of an asset or liability recorded in the balance sheet and its base rate.
There are two types of temporary difference such as deductible temporary difference
and taxable temporary difference.
Taxable temporary difference- This is the temporary difference that can yield taxable
amounts while calculating taxable profit or loss. It is the difference between the payment
structures of taxes. It results when the carrying value of assets is recovered or carrying