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Deferred Tax anlaysis Assignment

   

Added on  2021-06-14

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DEFERRED TAX ANLAYSIS Corporate AccountingNational Australian BankName of the Author

Table of ContentsINTRODUCTION......................................................................................................................1REQUIREMENT (i)..................................................................................................................1ANALYSIS OF CASH FLOW STATEMENT.........................................................................1REQUIREMENT (ii).................................................................................................................1OVERALL ANALYSIS OF OPERATING, FINANCING AND INVESTING ACTIVITIES1REQUIREMENT (iii)................................................................................................................2ITEMS REPORTED IN OTHER COMPREHENSIVE INCOME STATEMENT..................2REQUIREMENT (iv)................................................................................................................2OTHER COMPREHENSIVE INCOME STATEMENT- DESCRIPTION..............................2REQUIREMENT (v).................................................................................................................3WHY THESE ITEMS ARE REPORTED SEPARATELY AND NOT IN STATEMENT OFPROFIT AND LOSS?................................................................................................................3REQUIREMENT (vi)................................................................................................................3NATIONAL AUSTRALIAN BANK’S TAX EXPENSE IN CURRENT FINANCIALYEAR.........................................................................................................................................3REQUIREMENT (vii)...............................................................................................................3IS THE FIGURE SAME IS NATIONAL AUSTRALIA BANK LIMITED’S EFFECTIVETAX RATE TIMES NATIONAL AUSTRALIAN BANK’S ACCOUNTING INCOME?.....3REQUIREMENT (viii)..............................................................................................................4COMMENT ON DEFERRED TAX OR LIABILITY REPORTED IN BALANCE SHEET..4REQUIREMENT (ix)................................................................................................................4

REASON OF DIFFERENCE IN INCOME TAX PAYABLE AND CURRENT INCOMETAX EXPENSE.........................................................................................................................4REQUIREMENT (X).................................................................................................................4REASON OF DIFFERENCE IN INCOME TAX PAID AND CURRENT INCOME TAXEXPENSE..................................................................................................................................4REQUIREMENT (xi)................................................................................................................5

INTRODUCTIONAccounting is the basis of any concern that’s running an economic activity.Accounting involves presenting information to all the stakeholders of the business concern ina manner that enables them to make decisions full of worth to them. Entities present businessfinancials to the public through the annual reports. These reports contain all the statementsthat are required to be presented to public. Out of all those statements analysis is made. Thereport under consideration uses the example of a prestigious bank of Australia and NewZealand named, National Australia Bank Limited. The organisation is in existence for over160 years now and their aim is to be good with money. In their surrounding communities,they have funded some of their most important infrastructure like schools, hospitals androads ((National Australian Bank, 2017).REQUIREMENT (i)ANALYSIS OF CASH FLOW STATEMENTThe cash flow statement of an entity is prepared to enable the public to have anoverview of the cash transactions that entity is doing. Cash transactions involve all thoseactivities that lead to spending and receiving of cash by the National Australia Bank Limited.The cash flow statement is prepared on cash basis and not on accrual basis. It means that allthe transactions that involve cash are high pointed, irrespective of their year of accrual.The National Australia Bank Limited has shown a lot of diversity in the cash patternsover the financial year 2017 and financial year 2016. In financial year 2017, the dividendpayment by the National Australia Bank Limited had been AUD 4750 million as comparedto AUD 4593 million only in financial year 2016. The cash used and generated by theNational Australia Bank Limited has been lower in financial year 2017. The net increase incash and cash equivalents is just AUD 12573 million in 2017, while it was AUD 13,986 in2016. There are several other transactions also like interest received, dividend received,proceeds from issue of bonds, proceeds from debt issues etc which all have faced a downfallin financial year 2017 leading to the lower increase in cash and cash equivalents. Otherreason for same is high amounts of debts repaid (Dolan, et al. 2018).

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