H15020 Corporate Accounting: Analyzing Woodside Petroleum's Financial Statements

H15020 Corporate Accounting
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Contents
CASH FLOWS STATEMENT.....................................................................Error! Bookmark not defined.
(i) From your firm’s financial statement, list each item of reported in the cash flows statement
and write your understanding of each item. Discuss any changes in each item of cash flows
statement for your firm over the past year articulating the reasons for the change.................Error!
Bookmark not defined.
(ii) Provide a comparative analysis of your company’s three broad categories of cash flows
(operating activities, investing activities, financing activities) and make a comparative evaluation
for three years.............................................................................................Error! Bookmark not defined.
Other Comprehensive Income Statement....................................................Error! Bookmark not defined.
(iii) What items have been reported in the other comprehensive income statement?...............Error!
Bookmark not defined.
(iv) Explain your understanding of each item reported in the other comprehensive income
statement.....................................................................................................Error! Bookmark not defined.
(v) Why these items have not been reported in Income Statement/Profit and Loss StatementError!
Bookmark not defined.
Accounting For Corporate Income Tax.......................................................Error! Bookmark not defined.
(vii) 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..............................Error! Bookmark not defined.
(viii) Comment on deferred tax assets/liabilities that are reported in the balance sheet
articulating the possible reasons why they have been recorded............Error! Bookmark not defined.
(ix) 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?......................Error! Bookmark not defined.
(x) 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?.......................Error! Bookmark not defined.
(xi)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?................................................................................................Error! Bookmark not defined.
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Cash Flows Statement
i)From your firm’s financial statement, list each item of reported in the cash flows statement
and write your understanding of each item. Discuss any changes in each item of cash
flows statement for your firm over the past year articulating the reasons for the change.
Woodside petroleum Limited is a one of the largest company in Australia which deals in
production and exploration of oil and natural gas. It has its headquarters in west Australia,
Perth.
Cash Flow Statements:
Net cash flow from operating activities
1. Depreciation and amortization: cash outflow for depreciation from assets and other
amortization from expenses.
2. Disposal of oil and gas properties: sale proceeds from oil and gaseous properties.
3. Net finance cost: adjustments from or cash outflow from net finance cost from activities.
4. Tax expenses: cash outflow from tax paid in operations and other activities.
5. Change in fair value of financial instruments: cash flow from the adjustments of the
true value of financial markets and other financial instruments.
6. Changes in assets and liabilities: Increase or decrease in inventories, receivables and
other provisions.
7. Payments to employees: for share plans, purchase of shares and other benefits in form of
cash are given.
8. Interest received: from the operations that are performed from the oil or natural gas
production.
9. Dividend Received: from the money invested in various financial market.
10. Borrowing cost: payment as cash and interest of loan taken.
Cash flow from investing activities:
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1. Payment for exploration: cash outflow for exploration and production of oil and
natural gas.
2. Borrowing cost: this cost bears the expenses related to the financing activities.
3. Proceeds from oil and gas properties: sale of units of business as oil and natural gas
properties.
4. Payments for acquisition: cash outflow for acquisition and takeover of some units
foe production (Annual report, 2017).
Cash flow from financing activities:
1. Proceeds from borrowings: cash inflow from borrowings given to investors.
2. Repayment from borrowings: cash outflow of loan amount given with interest
3. Borrowing cost: cash outflow for the borrowing cost.
4. Proceeds from DRP: proceeds available from dividend reinvestment plans.
(Fabozzi, 2018).
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ii) Provide a comparative analysis of your company’s three broad categories of cash
flows (operating activities, investing activities, financing activities) and make a
comparative evaluation for three years.
Net cash flow from
activities
2015 2016 2017 Difference
in 2015-16
Difference
in 2016-17
Cash flow from
operating activities
2475 2587 2400 112 (187)
Cash flow from
investing activities
(5555) (2473) (1568) (3082) (905)
Cash flow from
financing activities
(58) 51 (805) (8) ( 754)
Cash flow from operating activities: it includes activities like expenses for operations, cash
generated from operations, dividend received, and interest received. From the above table the
difference in 2015-16 is 112 which mean the company has received the interest, dividend and
customer receipts. In 2016-17 it is (187) which mean the company shows the negative balance
and cash outflow from activity like payments for restoration depreciation and amortization.
Cash flow from investing activities: this includes payments for purchase of building,
equipment for production of petrol as well as payments for acquisition and borrowing cost. As
seen from the above table in 2015-16 it is (3082) which means the payments are made for
exploration and evaluation of petrol. In 2016-17 it is (905) which means the company paid for
the acquisition and disposal of oil and gas properties (Annual report, 2017).
Cash flow from financing activities: it includes receiving and giving loans, dividend
paid to the investors, borrowing cost related to finance. In the year 2015-16 the balance is
(8) which shows the company has made payments to interest and dividend to the
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investors. In 2016-17 the balance shows the (754) which shows the company has received
from the underwriters in the dividend reinvestment plan and received from the
borrowings (Defusco, et. al., 2015).
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