Corporate Accounting: Concepts and Analysis

Corporate Accounting

Abstract
This report summarised that corporate accounting is essential
for the organization which cover several aspects regarding
financial reporting. This assessment covers several topics which is
required to understand by the managers for reporting purpose or
produce financial statements for stakeholders.

Abstract............................................................................................2
INTRODUCTION...........................................................................1
MAIN BODY...................................................................................1
1. Explain the concept of accounting profit, taxable profit
and the other following terms..................................................1
2. Explain the recognition criteria of deferred tax assets
and deferred tax liability...........................................................3
3. Evaluate their firm’s tax expense in its latest financial
statements..................................................................................4
4. Selected company’s tax rate times in the firm’s
accounting income....................................................................6
5. Identify the deferred tax assets or liabilities that are
reported in the balance sheet articulating the possible
reasons why they have been recorded..................................7
6. Find that, there any current tax assets or income tax
payable recorded by your company and evaluate that Why
is the income tax payable not the same as income tax
expense....................................................................................11
7. 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
8. Evaluate the concepts of temporary difference and
permanent difference. Identify any permanent differences

that your company may have................................................14
9. What do you find interesting, confusing, surprising or
difficult to understand about the treatment of tax in your
firm’s financial statements.....................................................15
CONCLUSION.............................................................................16
REFERENCES............................................................................17

INTRODUCTION
Corporate Accounting is a particular financial reporting
branch that deals with corporate accounting, preparing their
accounting reports and cash flow statements, analyzing and
interpreting the sales figures of corporations and accounting
for particular events such as amalgamation, uptake and
consolidated time to prepare (Edwards, 2013). Investors are
particularly curious to know the company's financial
resilience in which they should have bought a certain stock.
Corporate accounting is thus performed to interact to them
that the firm's assets and liabilities. This report is based on
the ASX listed company that is Wesfarmer Ltd which is
Australia based Conglomerate Company. This assignment
covers the several topics such as accounting profit, taxable
profit, differed tax liabilities and assets. In addition, all the
treatment of this accounting aspect discussed with the help
of financial statement.
MAIN BODY
1. Explain the concept of accounting profit, taxable profit and
the other following terms
Accounting profit: It is the net profits of a corporation,
measured on the basis of GAAP (Generally Accepted
Accounting Principles). This contains the basic company
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expenses, such as overhead costs, depreciation, debt, and
taxation. It is used to calculate the overall profit which helps
the investor to make their investment related decisions.
Taxable profit: It is the amount used to estimating
income taxes. Taxable income may vary from recorded
profits for a variety of reasons that might be greater or
lesser. Financial statements on companies often differentiate
between profits before tax (PBT) and profit after tax (PAT).
Taxable temporary difference: It is the difference
among the value of balance sheet in asset or liability, and its
tax base. One temporary difference could be either
deductible or taxable (DeBusk, 2012). A temporary
deductible contrast is the yield amounts which can be
subtracted when evaluating taxable profit or loss in the long
term. A temporary taxable variation is a temporary
difference, which in future yields chargeable amounts when
assessing taxable profit or loss.
Deductible temporary difference: temporary
deductible gap is a conditional discrepancy which may yield
sums which can be excluded in the future when assessing
taxable income or loss. A temporary difference is created
between the balance sheet carrying value of an asset or
liability, and its tax base. For such deductible temporary
discrepancies a deferred tax benefit is acknowledged
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