Analysis of Tax Liabilities and Income Statements

The assignment involves analyzing the financial statement of PTM, focusing on tax payments, tax treatment, and changes in equity. It discusses how tax liabilities have been estimated as 1049 in the current year, which indicates that the firm will make payments of taxes in the upcoming year. The income tax expense for the operational activities of the firm amounted to 77,931, reflecting a liability payment of taxes meant to be paid by the firm.

Corporate Accounting
Platinum Asset Management
Limited (PTM)

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
1 Discussion based on each item of equity as per the changes in the equity.........................2
2. The Latest tax expenses of PTM in the current annual report...........................................5
3. Analysing the after-tax income of PTM on the basis of current annual report..................6
4. Presence of deferred tax payment in assets and liabilities...............................................10
5. Identifying the current tax assets of PTM as well as discussion based on variations in the
amount of income tax expense and income tax payable......................................................13
6. Analysing the difference of income tax expenses in cash flow statement and income
statement in the current annual report of PTM.....................................................................14
7. Analysing the tax treatment of PTM................................................................................14
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
The relevance of corporate accounting is to analyse the financial statement and making
suitable decisions which will help in enhancing the profitability as well as efficiency of the firm.
In the present report, there will be analysis of the financial statement of Platinum Asset
Management Ltd. There will be discussion over the changes in equity, income statement, balance
sheet as well as cash flow statements of the current disclosure. The report will be helpful in terms
of facilitating adequate commentary over such data set.
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1 Discussion based on each item of equity as per the changes in the equity
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On the basis of above statement of change in equity, it is helpful in analysing appropriate
changes in the equity as per current year and previous year changes. In accordance with 2015
carry forward balance for equity, it was 199448 as total equity. In 2016, there has been negative
balance of reserves such as -422 incurred, the retained profit for 200887 and the noin controlling
interest of -1017. There has been issue of new shares capital which are amounted to -3638 with
the reserves of 672 and have the retained loss of 211204 as per the payment of dividends were
made (Klinsky and et.al., 2017). The non controlling interest of the period was 29753 and
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Therefore, it presents the total equity of 364211. Further, the balance of Issued capital for 2016 is
747717,reveres were -587764, retained earning is for 175522, non controlling interest for 28736
were carried forwarded to the next year.
Therefore, in accordance with brought down balance of equity for 2016 in 2017, the firm
has gained profit after making the payment of tax which is 186026. It will be profitable for the
firm in terms of having adequate revenue and they will become able to make payments to their
shareholders (Annual Report, 2017). There has been non-controlling interest of 6621, the
exchange rate transaction subsidiaries of reserves as -595. The reverse of de-consolidation of
platinum world portfolios plc was amounted to 1001 were recorded (Reckien and et.al., 2017).
The treasury share acquired amounted to -4784, reserves of share-based payments is for 1540
and the total dividends were paid as -181687 which were out of the retained earnings made by
firm during the period. Therefore, the total balance for 2017 over the change in equity was
742933 as issued share capital, -585818 as reserves, 177959 as retained profits and 335074 as
total equity of the firm.
2. The Latest tax expenses of PTM in the current annual report
In consideration with the payment of tax made by firm in the year 2016, it was 81,922
while in the current year the payment of 80686 over the income generated in the period. Thus, it
can be said that in the current year, the business is having favourable growth as they are having
adequate capital structure such as revenue collection for the operational activities (Heckemeyer
and Overesch, 2017). The firm is also having good income as the costs of application in
operations is quite lower than the previous period as well as the revenue generation is quite
satisfactory in this year.
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3. Analysing the after-tax income of PTM on the basis of current annual report
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The after-tax income gained by the firm will be known as the amount which is actually
left after making all the operational expenses, interest, and tax payments. Thus, in the year 2016,
Platinum Assets Management as gained losses form such operational expense and they were able
to make payment to the shareholders. Therefore, in 2017, the firm has made gains even after
paying off the operational expense (Gauthier and Laroque, 2017). The revenue which had
generated by them after paying the company tax is 192647. Therefore, it indicates the
profitability of firm and which will be payable to the shareholders in the form of dividends. The
shareholders and investors seek profitability of an entity which will benefit them in terms of
dividends of bonus payments. So, it can be said that if the firm is having adequate revenue
generation, then it will be fruitful for them in terms of attracting large numbers of investors and
having strong capital structure.
On the other side, it can be said that in the current year, there has been profitable gains
from the business operations which has risen the market value of the entity. The effects have
been seen as per the increment in the share price of the firm such as 31.74 is the current earning
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per share while it was 34.24 in 2016. Thus, if the firm will have new shareholders, then they will
have appropriate capital gathering as well as proper operational activities in the continuation.
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4. Presence of deferred tax payment in assets and liabilities
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Deferred tax Assets: These are the situations where the firm made excessive payment to
the taxes and have shown in the balance sheet. It can be refundable or returned by the
government in terms of tax return, reliefs etc. These are mainly relevant with the over and
excessive payments of the taxes in terms of rent, insurance premiums etc. (Kochiyama and Seki,
2017). However, in accordance with Platinum Assets Management Ltd, the deferred tax has been
paid by them in 2016 and 2017 was nil both the years. Thus, it indicates that the firm did not
make any excessive deferred tax payments over the assets of the business.
Deferred Tax Liabilities: This is the difference between the income before tax and after
tax of firm in a period. It considers the tax carrying values of the firm which are to be enacted as
the estimated tax payable and the income tax rates in the years. The presence of such elements in
the balance sheet of the firm which indicates that the firm will going to make such amount of tax
payments in the future (Bradbury and Mear, 2017). In accordance with the deferred tax payments
made by Platinum Assets Management Ltd in 2017 is 1049 while it was 995 in 2016.
Therefore, the reason behind including such elements in the financial statement is to
facilitate the information to the interested parties such as government, banks and financial
institutions. These balances indicate and executed the schedule of the tax returns and the taxes
which are going to be paid by the firm in the respected years (Making Sense Of Deferred Tax
Assets And Liabilities, 2017). This will be beneficial in terms of having the adequate utilisation
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of the investments and strategies will be planned in relation with lending, spending and
purchases of materials.
5. Identifying the current tax assets of PTM as well as discussion based on variations in the
amount of income tax expense and income tax payable.
Illustration 1: cash flow statement
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In accordance with the variations in the income tax expenses and income tax payment, it
is due to the income tax expense to be charged over the income generated by the firm over
operating activities (Abdallah, 2017). The income tax paid over the total cash inflows and
outflows in cash flow statement. There has been changes because the taxes are to be charged as
per fixed rates and income gained in both the methods. In accordance with the income tax
expense of Platinum Assets Management Ltd as per the income statement of the firm, it has been
estimated over the operating profit is amounted to 165,386 while the income tax paid by the firm
in the year 2017 is 80,686. Thus, it indicates that the firm has made payment of the 80,686 as the
tax as reflected in the cash flow statements of organisation.
On the other side, there is no current tax payment made by the firm during the period. It
can be due to limited operations of the firm will have limited gains and due to such reason, there
has been no payments for any further taxes.
6. Analysing the difference of income tax expenses in cash flow statement and income statement
in the current annual report of PTM
Income tax expense: These are the payment of taxes which are based on the gains and
profit made by firm during the period as has to have showed in the income statement. These are
the payment which are actually made over the Gaines and owes of the organisation. In
accordance with the income tax expenses made by Platinum Assets management in the current
year such as 16381 which has been charged over the operating income of such period.
Income tax payable: These are the gains which are owned by a firm over the taxes and
are needed to be shown in the cash flows and balance sheet of the firm (Prakoso, 2017). These
are the taxes which are meant to be paid by the entity in the future as it reflects the liabilities of
the firm. In accordance with Platinum Assets Management Ltd, the tax payable is amounted to
2510.
7. Analysing the tax treatment of PTM.
There have been various interesting facts that were analysed as per determining the tax
treatment of Platinum Assets Managements Ltd. during the period of 2016 and 2017. Therefore,
in accordance with the deferred tax payments by the firm in the years such as in assets, it was nil
in 2016 same as in the year 2017, it showed the nil balance. In accordance with the deferred tax
liabilities, these are the payments which are meant to be paid by the firm in the near future.
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Therefore, the deferred tax liabilities have been estimated in the current year as 1049 while in
2016, it was 995 which indicates that the firm will make payments of taxes in the upcoming year.
Amount of 1049 is the liabilities which will be paid by the professionals in the following periods
(Kochiyama and Seki, 2017).
However, in accordance with the Income tax expense which are to be charge over the
operational activities of firm during the year amounted to 77,931. This measurement has been
reflected in the income statements of PTM. The income taxes payable will be charged as 80686
which is the liability payment of taxes which are meant to be paid by firm and can be seen in the
cash flow statements as well as added in the liabilities of balance sheet.
CONCLUSION
On the basis of above study, it can be said that there has been analysis made over the
financial statement of PTM. The determination of the tax payments as well as the tax treatment
made firm and changes in equity has been seen in such statement. The report is beneficial as it
helps in making adequate improvement of knowledge and information.
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REFERENCES
Books and Journals:
Abdallah, A. A. J., 2017. The Conformity Level of Income Tax Accounting In Jordan with the
Requirements of the International Accounting Standard IAS (12) in Terms of Taxable
Temporary Differences’ Recognition. International Business Research. 10(5). p.51.
Bradbury, M. E. and Mear, K. M., 2017. Interpreting the Impact of IFRS Adoption. Australian
Accounting Review.
Gauthier, S. and Laroque, G., 2017. Production Efficiency and Profit Taxation.
Heckemeyer, J. H. and Overesch, M., 2017. Multinationals’ profit response to tax differentials:
Effect size and shifting channels. Canadian Journal of Economics/Revue canadienne
d'économique. 50(4). pp.965-994.
Klinsky, S. and et.al., 2017. Why equity is fundamental in climate change policy research.
Global Environmental Change. 44. pp.170-173.
Kochiyama, T. and Seki, K., 2017. Discretion in the Deferred Tax Valuation Allowance and Its
Impact on Firms' Dividend Payouts.
Prakoso, I., 2017. Value Relevance Analysis Of Deferred Tax: Asean Perspective. Jurnal
Keuangan dan Perbankan. 16(2).
Reckien, D. and et.al., 2017. Climate change, equity and the Sustainable Development Goals: an
urban perspective. Environment and Urbanization. 29(1). pp.159-182.
[PDF]
Annual Report. 2017. [PDF]. Available through
:<https://www.platinum.com.au/PlatinumSite/media/Financial-Statements/ptm_0617.pdf>.
Online:
Making Sense Of Deferred Tax Assets And Liabilities. 2017. [Online]. Available
through :<https://quickbooks.intuit.com/r/taxes/making-sense-of-deferred-tax-assets-and-
liabilities/>.
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