Corporate Accounting Individual Project

Corporate Accounting Individual project

Table of Contents
INTRODUCTION.......................................................................................................................................3
MAIN BODY..............................................................................................................................................3
i. Briefly explain the concepts of accounting profit, taxable profit, temporary difference, taxable
temporary difference, deductible temporary difference, deferred tax assets and deferred tax liability. 3
ii. Briefly explain the recognition criteria of deferred tax assets and deferred tax liability.....................5
iii. What is your firm’s tax expense in its latest financial statements?....................................................5
iv. 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 highlighting the reasons for differences.....................................5
v. Identify the deferred tax assets/liabilities that are reported in the balance sheet articulating the
possible reasons why they have been recorded......................................................................................6
vi. 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?.....................................................................6
vii. 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?..........................................................................7
viii. Briefly explain the concepts of temporary difference and permanent difference. Identify any
permanent differences that your company may have.............................................................................8
ix. 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?....9
Conclusion.................................................................................................................................................10
REFERENCES..........................................................................................................................................11

INTRODUCTION
Corporate Accounting is a particular financial reporting subdivision which interacts with
financial reporting for firms, planning of their annual report and statement of cash flows,
evaluation and discussion of company financial performance and financial reporting for
particular events such as merger, uptake, and preparation of financial statements (Maas,
Schaltegger and Crutzen, 2016). The project report is based on a ASX listed company that is
CAPE RANGE LTD. Cape Range Limited (ACN 009 289 481) (Company or Cape Range) was
integrated as an unregistered limited company on 11 January 1988 and was originally mentioned
on the official version. Since the withdrawal of the corporation from the Official List on 24
March 2016, the Company has been researching a number of options with a perspective to
acquiring a business and/or income to allow the restructuring of the corporation and its re-entry
into the ASX. The project report covers detailed information about various kinds of concepts
such as accounting profit, taxable profit and many more. As well as report covers information
about deferred tax liabilities which are analyzed from prepared financial statement of chosen
company.
MAIN BODY
i. Briefly explain the concepts of accounting profit, taxable profit, temporary
difference, taxable temporary difference, deductible temporary difference,
deferred tax assets and deferred tax liability.
A public enterprise usually refers to an organization that can offer to the general public, typically
via an inventory bourse, its registration securities (stock, bond, etc.), but can also include
companies whose shares are being traded via an OTC (counter) via market managers who utilize
non-exchange citation services such as the OTCBB and Pink slabs (Atanasov and Black, 2016).
A government-owned business can even use the name "public entity." This sense of a "public
enterprise" is derived from and for the general public (public property) and from the less basic
usage in the United States of the public property ownership and preferences.
Accounting profit- Profit, when it comes to accounting, is the earnings allocated to the owner in
a profitable context of market manufacturing. Profit is an indicator of liquidity, which would be

the main interest of the proprietor in the stage of manufacture of the economy. There are a
number of profit measures in prevalent use.
Taxable Profit- Tax profit or taxable profit shall be used to differentiate between profitability
ratio and earnings. Taxable revenue is the money used to compute income tax. For a variety of
reasons, taxable profits may vary from financial performance and may be greater or lesser.
Temporary difference- The distinction between the carrying amount of the asset and the loss of
value in the income statement and its tax base is a provisional difference. A transient taxable
disparity is a transient discrepancy that may end in taxable sums in the future until the taxable
income or loss is calculated.
Taxable temporary difference- Temporary variations are discrepancies between the revenue
recognition laws and the tax accounting regulations that allow the pre-tax accounting income
applicable to tax to be higher or lower than the taxable profit during the same year and to be
lower or higher for the same percentage in subsequent periods.
Deductible temporary difference- A temporary deducible distinction will be a provisional change
in the total of taxable gains or losses that can be subtracted in long term (Allen, Ramanna and
Roychowdhury, 2018). The distinction between the carrying amount or the liability in the
income statement and its tax base is a provisional distinction. A deferred tax is recognized for all
deductible temporary differences if a taxable profit is likely to appear that will be offset against
coinsurance distinctions.
Deferred tax assets- Due to taxes paid or managed to carry forward, but not yet identified on the
statement of revenue, deferred tax assets are often established. For instance, deferred tax assets
can be developed as income or fees are recognized by tax authorities at times different from that
of the financial statement. The asset contributes to reducing the potential tax liabilities. It must
be noted that even where the discrepancy in a surplus benefit or a loss of the asset is to pay for
potential income is considered a deferred tax asset.
Deferred tax liability- Deferred tax liability is a tax which has, but has not yet been paid, been
evaluated or due for the current cycle. The postponement is based on the discrepancy between
both the period the tax is charged and the date the bill is collected. The amount of the taxation a