Corporate Accounting Assignment Solved (Doc)

Running head: CORPORATE ACCOUNTING
Corporate accounting
Name of the student
Name of the university
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1CORPORATE ACCOUNTING
Table of Contents
(i) Equity items and their explanation.....................................................................................2
(ii) Tax expenses...................................................................................................................4
(iii) Difference in tax expense and tax rate............................................................................5
(iv) Reported deferred tax assets or liabilities.......................................................................5
(v) Current tax.......................................................................................................................7
(vi) Difference in the income tax as per cash flow statement and income statement............7
(vii) Confusing part and new insights.....................................................................................8
Reference....................................................................................................................................9

2CORPORATE ACCOUNTING
Treasury Wine Estates (TWE) is the global distribution and making company for
wine that has its head quarter in Melbourne, Australia. The company operates as the wine
company in New Zealand, Australia, Europe, Asia and America. It is engaged in winemaking
and viticulture, sale, marketing and supply of wine. Further, the company offers luxury and
commercial wines. At Treasury Wine Estates, the company is focussed on continuous
improvement, innovation and commercial achievement. The business of the company is
driven by the leaders who are drawn from rich diversity of the industrial experience and then
combine the experience with skill, talent, passion commitment. The company is subject to the
Australian Income taxes and the other jurisdiction where it carries out its foreign operation
(Tweglobal.com 2018).
(i) Equity items and their explanation
As per the company’s annual report for the year ended 2017, it is recognized that the
item included under equity are –
 Contributed equity – the contributed equity of the company includes ordinary shares
and treasury shares. The ordinary shares allow the holders to take part in the
dividends and winding up procedures. It further allows 1 vote to each holder either by
proxy or in person at the meeting. On the other hand, the treasury shares are the part
of the shares that the entity keeps in own treasury (Abdul, Mohd and Kamardin 2016).
The stock in treasury are added through buyback or repurchase from the shareholders
or the situation may be that the shares were never been issued to public.
 Reserves – under the financial accounting the term reserve represent the part of the
shareholder’s equity without taking into consideration the basic share capital. The
reserve may include various items like capital reserve that is generally created through
issuing the shares at the value exceeding the par value. However, the reserve of TWE

3CORPORATE ACCOUNTING
includes the items like reserves from cash flow hedge, reserves from the share based
payments and reserve with regard to the foreign currency translation.
 Retained earnings – it is the profit that is generated by the entity and not distributed to
the stockholders through dividend and are kept as reserve or reinvested in business
(AlTroudi and Milhem 2013). It is the cumulative income of the company since the
formation of the company and is reduced by the amount of dividend decorated since
that.
(Refer page no. 64 of annual report for year ended 2017)
Changes in equity items
Equity items 2017 ($’M) 2016 ($’M)
Contributed equity 3,528.6 3,533.6
Reserves (23.9) 17.1
Retained earnings 99.6 15.1
Reasons for changes –
 Contributed equity – it has been reduced from $ 3,533.6 million to $v 3,528.6 million
due to purchasing of own share amounting to $ 18.3 million and vesting of deferred
shares amounting to $ 13.3 million.
 Reserves – reserves has been change from $ 17.1 million to $ (23.9) million expenses
incurred for shares based payments amounting to $ 18.6 million, vesting of deferred