Financial Reporting Assignment- Financial Statements

   

Added on  2020-05-28

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Running head: FINANCIAL REPORTINGFINANCIAL REPORTINGName of the Student:Name of the University:Author’s Note:
Financial Reporting Assignment- Financial Statements_1
FINANCIAL REPORTING1Executive SummaryThe main purpose of this assignment is to analyze the financial statements of two company which areBlackmores ltd and Bega Cheese Ltd. The report aims to provide analysis of the tax and objectives of theaccounting for tax. The report will be focusing on the deferred tax assets and liabilities of the both thecompanies. The report will be concluding with the impact on decision making process of thestakeholders if such deferred tax assets and liabilities of the company are not shown in the annualreports.
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FINANCIAL REPORTING2Table of ContentsExecutive Summary.....................................................................................................................................1Introduction.................................................................................................................................................3Objectives for Accounting for Income Tax...................................................................................................3Deferred Tax Assets and Liabilities..............................................................................................................5Analysis of financial Statement...................................................................................................................7Impact of Decision Making of Stakeholders................................................................................................8Conclusions..................................................................................................................................................9Reference..................................................................................................................................................10Appendix...................................................................................................................................................11
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FINANCIAL REPORTING3IntroductionThe main purpose of the report is to analyze the deferred tax assets and liabilities. The report will beanalyzing the financial statements of both the companies which are Blackmores ltd and Bega Cheese ltd.The report will be analyzing whether both the companies have any deferred tax assets and deferred taxliabilities and whether such are properly disclosed in the financial reports of 2017 (Laux, 2013). Thereport will be concluding how omission of Items of deferred tax assets and deferred tax liabilities willimpact decision making process of stakeholders and such will be impacting the investing decisions of thestakeholders.Overview of the Companies Blackmores is an Australian company which is engaged in health supplements which wasfounded in 1930. The company first opened its first health shop in Brisbane in Australia. The companywas founded by Maurice Blackmore and its headquarter is situated in Sydney, Australia. The companyhas a market specialization of $2 billion as per recent estimates (Company information., 2018).Bega Cheese is an Australian Based Dairy company which is engaged in the manufacture of dairyproducts. As per the current estimates the company is the largest dairy company in Australia with amarket valuation of around $775 million. The company was founded in 1899 and its headquarter issituated in Bega, New South Wales, Australia (Accc.gov.au., 2018).Objectives for Accounting for Income TaxIncome tax is shown in the consolidated balance sheet of the company and also in incomestatement of the company. The current income tax paid is shown in the income statement and the sameis also recorded in the cash flow statement. However in certain situations the figures which are shown inthe profit and loss account differs from the actual cash flow as shown in cash flow statements(Harrington, Smith & Trippeer, 2012). The reasons for such can be the presences of deferred tax assetsand liabilities which can be set off or set on. The consolidated profit and loss statement of Blackmoresltd shows that the company has an income tax expenses of $24023000 in 2017 which has significantlydecreased from the previous year which was $43391000 in 2016. The notes to account of the companyshows that the company has a deferred tax benefit $3092000 and also adjustments which arerecognized in the current year is $844000. On the other hand the income tax expenses as shown in theannual reports for Bega Cheese ltd for 2016 is shown at $59290000 which is more than what was the
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