HI5020 Corporate Accounting Report: ASX Companies Performance

This report provides a detailed analysis of the financial performance of three Australian Securities Exchange (ASX) listed companies operating in the retailing industry: Breville Group, Accent Group, and Joyce Corporation. The report examines key aspects of corporate accounting, including equity and liability positions, cash flow statements, other comprehensive income statements, and accounting for corporate income tax. It lists and analyzes the alterations in equity and liability items over three years, provides comparative analyses of debt and equity, and assesses the changes in cash flow from operating, investing, and financing activities. Additionally, the report explores items of comprehensive income, tax expenses, effective tax rates, and deferred tax assets and liabilities. The analysis is supported by data extracted from the companies' financial statements, offering insights into their financial health and performance over the specified period.

CORPORATE ACCOUNTING

EXECUTIVE SUMMARY
Corporate accounting sets a new standard and referred as recording, measurements along with
interpretation of financial information and data of limited organization. The present report is
related to retailing industry and companies listed on ASX. The accent retail business in
integrated with Hype business in its operating environment of Apparel. The other company is
Breville Group which sells electrical consumer products and home goods and Joyce corporation
retails wardrobe and kitchen products. It had shown that retailing industry is having various ups
and down which could be resolved by following appropriate strategy.

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................5
EQUITY & LIABILITY..................................................................................................................5
1. Listing item of equity with its alteration over last three years................................................5
2. Listing item of liability with its change over 3 years..............................................................6
3. Comparative analysis of debt and equity position of three business....................................10
CASH FLOW STATEMENT .......................................................................................................10
4. Listing items of cash flow with its changes..........................................................................10
5. Comparative analysis of broad categories of cash flow........................................................11
6. Comparative analysis of three companies.............................................................................13
OTHER COMPREHENSIVE INCOME STATEMENT .............................................................13
7. Stating items of comprehensive income statement for each organisation............................13
8. Reason of these items not stated in income statement..........................................................14
9. Comparative analysis of other comprehensive income statements.......................................14
10. OCI must be used for evaluating performance of managers of organization.....................15
ACCOUNTING FOR CORPORATE INCOME TAX..................................................................15
11. Tax expenses in the latest financial statements...................................................................15
12. Calculating effective tax rate..............................................................................................15
13. Commenting on deferred tax assets and liability................................................................16
14. Increment or decrement in deferred tax asset and liability.................................................16
15. Calculating cash tax amount...............................................................................................17
16. Calculating cash tax rate.....................................................................................................18
17. Reason of differing cash tax rate from book tax rate..........................................................19
CONCLUSION..............................................................................................................................20
REFERENCES..............................................................................................................................21
APPENDIX....................................................................................................................................22
Breville group- 2018.................................................................................................................22
Breville group- 2017.................................................................................................................24
Accent Group 2017...................................................................................................................28
........................................................................................................................................................32

Joyce Corporation 2016-...........................................................................................................35
Joyce corporation 2017-2018....................................................................................................37

INTRODUCTION
Corporate accounting is considered as special branch of accounting as it deals with
preparation of final accounts, accounting organization and appropriate interpretation of financial
statements. The present report is related to retailing industry and companies listed on ASX. The
accent retail business in integrated with Hype business in its operating environment of Apparel.
The other company is Breville Group which is involved in selleing electrical consumer products
and home goods and Joyce corporation retails wardrobe and kitchen products along with
installation and supply stores in Wallspan and kitchen connection brand name. Henceforth, the
above organization are comprised in retailing sector and ASX listed as well.
EQUITY & LIABILITY
1. Listing item of equity with its alteration over last three years
2016 2017
% change
in 2017 2017 2018
% change
in 2018
Breville group
Issued capital 140050 140050 0.00% 140050 140050 0.00%
Reserves 5134 4930 -3.97% 4930 6782 37.57%
Retained earnings 96489 110885 14.92% 110885 126341 13.94%
Total equity 231405 246005 6.31% 246005 259609 5.53%
In year 2017 and 2018, its equity raised with 6.31% and 5.53% respectively. It has been
clearly viewed that there is no change in issued capital as there was alteration in equity because
of increment in retained earning by 14.92% but in 2017, it has raised reserves and retained
earning as well (Annual report of Breville, 2017).
JOYCE
2016 2017 % change in 2017 2017 2018
% change in
2018
Joyce corporation
Contributed equity 17975 18019 0.24% 18019 18060 0.23%
5

Reserves 2699 2699 0.00% 2699 0 -100.00%
Non controlling
interest 1026 1930 88.11% 1930 3073 59.22%
Retained earnings 4290 3838 -10.54% 3838 6975 81.74%
Total equity 25990 26486 1.91% 26486 28108 6.12%
From year 2017 to 2018, equity raised with 1.91% because of huge increment in
contributed equity and retained earning and in 2018, it raised with 6.12% as very less proportion
because no major change in contributed equity.
ACCENT GROUP
2016 2017 % change in 2017 2017 2018
% change in
2018
Accent group
Issued capital 257741 385310 49.50% 385310
38697
3 0.43%
Reserves 7780 3208 -58.77% 3208 12151 278.77%
Accumulated losses 22693 19603 -13.62% 19603 8184 -58.25%
Non controlling
interest 1547 1737 12.28% 1737 973 -43.98%
Total equity 244375 370652 51.67% 370652
39191
3 5.74%
The equity raised with 51.67% and 5.74% in 2017 and 2018 respectively as in 2017 non
controlling interest raised along with issued capital. On the contrary, its equity raised in year
2018 because of increment in issued capital, reserves, accumulated loss and decrement in non
controlling interest (Annual report of Accent group, 2017).
6

2. Listing item of liability with its change over 3 years
Liability
2016 2017 % change in 2017 2017 2018
% change in
2018
Breville group
Trade and other
payables 74878 94789 26.59% 94789 85000 -10.33%
Borrowings 13487 0 -100.00% 0 0 0.00%
Current tax
liabilities 3700 5492 48.43% 5492 8000 45.67%
Provisions 13916 14828 6.55% 14828 2000 -86.51%
Other financial
liabilities 2223 1837 -17.36% 1837 14000 662.11%
Current
liabilities 108204 116946 8.08% 116946 109000 -6.79%
Other payables 4265 4199 -1.55% 4199 7000 66.71%
Borrowings 10362 35841 245.89% 35841 45000 25.55%
Provisions 1131 924 -18.30% 924 1000 8.23%
Non current
liabilities 15758 40964 159.96% 40964 53000 29.38%
Total liability 123962 157910 27.39% 157910 162000 2.59%
Reason for change in liability in 2018
7

 Trade and other payables: Amount owned through suppliers and not paid on immediate
basis in form of cash are not replicated as trade payable is decreased.
 Other payables
 Borrowings: The total amount of collateral against lender will lend funds related to
business. Breville group reduced its borrowing in year 2018
 Provisions
Reason for change in liability in 2017
 Huge borrowings
JOYCE
2016 2017 % change in 2017 2017 2018
% change in
2018
Joyce Corporation
Trade and other
payables 8864 10073 13.64% 10073 11779 16.94%
Provisions 1000 1361 36.10% 1361 1528 12.27%
Interest bearing
loans 0 0 0.00% 0 435 0.00%
Provisions for
income tax 1153 1153 0.00% 1153 820 -28.88%
Current
liabilities 11017 12587 14.25% 12587 14562 15.69%
Interest bearing 0 8600 0.00% 8600 10056 16.93%
8

loans
Deferred tax
liabilities 317 262 -17.35% 262 554 111.45%
Provisions 962 712 -25.99% 712 818 14.89%
Non current
liabilities 1279 9574 648.55% 9574 11428 19.36%
Total liability 12296 22161 80.23% 22161 25990 17.28%
Reason for change in liability in 2018
 Huge provisions
Reason for change in liability in 2017
 Decrement in derivative financial instrument
 Trade and other payables (increase)
2016 2017 % change in 2017 2017 2018
% change in
2018
Accent group
Trade and other
payables 58986 88849 50.63% 88849 80965 -8.87%
Borrowings 10013 15097 50.77% 15097 22625 49.86%
Derivative
financial
instrument 6608 5054 -23.52% 5054 251 -95.03%
Income tax 5236 7990 52.60% 7990 10497 31.38%
Employee 3203 4893 52.76% 4893 6107 24.81%
9

benefits
Deferred lease
incentives 3160 4949 56.61% 4949 7174 44.96%
Current
liabilities 87206 126832 45.44% 126832 127619 0.62%
Borrowings 40000 88625 121.56% 88625 51000 -42.45%
Derivative
financial
instrument 1968 710 -63.92% 710 184 -74.08%
Deferred tax 7314 13685 87.11% 13685 15447 12.88%
Employee
benefits 332 613 84.64% 613 64 -89.56%
Deferred lease
incentives 8218 21987 167.55% 21987 18494 -15.89%
Non current
liabilities 57832 125620 117.22% 125620 85189 -32.19%
Total liability 145038 252452 74.06% 252452 212808 -15.70%
Reason for change in liability in 2017
 Deferred lease incentives
 Fewer borrowings
Reason for change in liability in 2018
 Deferred lease incentives
 Borrowings
 Trade and other payables
3. Comparative analysis of debt and equity position of three business
10

Brevillie group
Debt equity
position
Joyce
corporation
Debt
equity
position
Accent
group
Debt
equity
position
Debt 109000 27.81% 11341 30.38% 127619 24.56%
Equity 283000 72.19% 25990 69.62% 391913 75.44%
Total 392000 100.00% 37331 100.00% 519532 100.00%
Interpretation: There is representation of capital structure of all Brevillie, Joyce and
Accent group with their debt equity position. The ideal structure is 40:60 where no organization
are not following this. Joyce group has high debt comparatively to Accent and Brevillie group
and on contrary, Accent has huge equity from Brevillie and Joyce group.
CASH FLOW STATEMENT
4. Listing items of cash flow with its changes
The cash flow comprises cash flow from three broad categories which are operating,
investing and financing activities. Generally, operating activities reports cash amount through
income statement which was originally stated on accrual aspect. Investing activities considers
cash flow through sales and purchase related to long term investments such as property,
equipment and plant. Simultaneously, financing activities reports transactions of debt and equity
and cash flows such as repurchase of sale of stock, payment of dividends along with bonds. In
the same series, cash obtained through undertaking out a cash or loan used for repaying long
term debt.
Breville group: Operating activities has considered receipts and payments from
employees, suppliers and customers along with finance cost and income and income tax
payment. The overall impact is related to increment its aggregate by 14.49% in 2016 and in year
2017, it rose by 19.86%. With context to investing activities, it has purchase of intangible assets,
plant and equipment and proceeds through sale was introduced in year 2017. As in year 2016, it
decreased by 38.73% and in 2017 rose by 39.394%. On basis of financing activities such as
proceeds and repayment of borrowings along with irretrievable cash contribution and payment of
equity dividends. In year 2016 and 2017, it was deceasing by 23.43% and 24.82% respectively.
11

Joyce corporation: In this organization, it will be considering all receipts and payments
such as insurance claims, dividends, interest received and interest and other cost of finance paid.
Similarly, its investing activities has major ups and down because of change in payments of
intangible assets and proceeds through sale for availability of business (Annual report of Joyce
group, 2017). With context of financing activities, it decreased by particular proportion as
transactions with non controlling interest has been introduced and proceeds has also decreased.
Accent group: On basis of operating activities, it had raised in both year 2016 and 2017
but in 2016, its investing activities cash decreased and then raised by 70.58% in 2017. With
context of financing activities, repayment of Accent vendor notes totally rid off and proceeds
from issuance of shares has reduced with huge proportion along with increment in proceeds
through borrowing had raised. This settlement had helped in increasing cash flow from financing
activities with huge proportion.
5. Comparative analysis of broad categories of cash flow
Breville group
2016 2017
%
change
in 2017 2017 2018
%
change
in 2018
Breville group
Net cash flow
from operating
activities 52289 62672 19.86% 62672 75000 19.67%
Net cash flow in
investing
activities 13789 19297 39.94% 19297 29000 50.28%
Net cash flow in
financing
activities 33958 25531 -24.82% 25531 34000 33.17%
Joyce corportation
2016 2017 % 2017 2018 %
12

change
in 2017
change
in 2018
Joyce corporation
Net cash flow
from operating
activities 2173 5335 145.51% 5335 9025 69.17%
Net cash flow in
investing
activities 17294 -18455
-
206.71% -18455 4930
-
126.71%
Net cash flow in
financing
activities -10180 3167
-
131.11% 3167 3176 0.28%
Accent group
2016 2017
%
change
in 2017 2017 2018
%
change
in 2018
Accent group
Net cash flow
from operating
activities 44357 45419 2.39% 45419 70068 54.27%
Net cash flow in
investing
activities 32097 54752 70.58% 54752 16318 -70.20%
Net cash flow in
financing
activities 1877 10504 459.62% 10504 -60272
-
673.80%
6. Comparative analysis of three companies
13

Breville Group Joyce corporation Accent group
Base year % 2017 % 2018 % 2017 % 2018 % 2017 % 2018
Net cash flow
from operating
activities 19.86% 19.67% 145.51% 69.17% 2.39% 54.27%
Net cash flow in
investing
activities 39.94% 50.28%
-
206.71%
-
126.71% 70.58% -70.20%
Net cash flow in
financing
activities -24.82% 33.17%
-
131.11% 0.28% 459.62%
-
673.80%
Interpretation: The above table is comparative analysis of three organization with its
operating, investing and financing activities. It has been viewed that Joyce group in year 2017
was giving huge cash from operating activities and in year 2018 as well. Similary in investing
activities also Joyce was leading it was using the highest cash for investing activities in year
2017 and in 2018, Accent group was at second position with 70.58%. With context of financing,
Accent group is leading with huge percentage and followed through Joyce corporation. In
nutshell, Joyce group has provided cash from operating activities, Breville and Accent group
provides cash from other activities.
OTHER COMPREHENSIVE INCOME STATEMENT
7. Stating items of comprehensive income statement for each organisation
Breville group: There is presentation of foreign currency translation differences, net
change in fair value of cash flow hedge along with income tax on other comprehensive income
(Annual report of Breville, 2018).
Joyce Corporation: The other comprehensive income statement is considering gain and
loss on revaluation of property, benefit of income tax, reclassification adjustments and fair value
gain with cash flow hedges.
Accent group: Similarly, to both organization it has also considered net change in fair
value of cash flow hedge and foreign currency translation.
14

8. Reason of these items not stated in income statement
As per accounting standards, items of other comprehensive income are not stated in profit
and loss statement does not contribute in net income. Rather, the figures are stated as
accumulated other comprehensive income with context of shareholder's equity in balance of
organization (Veltri and Ferraro, 2018). However, only unrealized items could be claimed as
other income as in case transaction are realized such as investment of organizations then it
should rid from balance sheet of organization as realized loss or gain in profit and loss statement.
9. Comparative analysis of other comprehensive income statements
2016 2017
%
change
in 2017 2017 2018
% change
in 2018
Breville group
Net income 46680 50172 7.48% 50172 53834 7.30%
OCI
Foreign currency translation differences 6979 1646
-
76.41% 1646 -2129 -229.34%
Net change in fail value of cash flow
hedge 3906 -2868
-
173.43
% -2868 -491 -82.88%
Income tax on OCI -1296 1195
-
192.21
% 1195 696 -41.76%
OCI for year, net of income tax 9589 -27
-
100.28
% -27 -1924 7025.93%
Total comprehensive income for
attributable to its members 56269 50145
-
10.88% 50145 51910 3.52%
Joyce Group: With context of their financial statements, there is absence of disclosure of other
comprehensive income.
2016 2017 % 2017 2018 % change
15

change
in 2017 in 2018
Accent group
Net income 30183 29352 -2.75% 29352 44000 49.90%
OCI
Net change in fail value of cash flow
hedge -6937 1431
-
120.63
% 1431 7434 419.50%
Foreign currency translation 345 43
-
87.54% 43 -440
-
1123.26%
Total OCI 23591 30826 30.67% 30826 50994 65.43%
10. OCI must be used for evaluating performance of managers of organization
Other comprehensive income is referred as very expansive aspect of net income as in the
past, alterations to margin of business is deemed for outside of major core operations or it is
overly volatile and allowed for flow via stakeholders equity. It provides brief understanding of
daily operations of organization which is major consideration. In simple words, it is crucial
metric for evaluation of earnings of organizations and managers as well. It helps in improving
transparency and reliability of financial reporting and gives insights relate to essential items
(Banks, Hodgson and Russell, 2018). Further, reported investments unrealised losses of gain
might help managers for predicting realized, actual losses or gains on investment.
Simultaneously, if organization operates overseas, then other income contribute
efficiently for understanding dynamics related to foreign operations of company. Furthermore, it
also helps in assessing impact of foreign exchange fluctuations and to determine extent about
future pension liabilities of managers and companies might give impact on unrealized margin.
Henceforth, OCI should be used for evaluating performance of managers.
ACCOUNTING FOR CORPORATE INCOME TAX
11. Tax expenses in the latest financial statements
2018
16

Breville group
Joyce
Corporation
Accent
group
Income tax expense 33000 3101 16918
12. Calculating effective tax rate
2018
Breville group
Joyce
Corporation
Accent
group
Income tax expense 33000 3101 16918
earnings before tax 55000 9824 60918
Effective tax rate 60.00% 31.57% 27.77%
During calculation of effective tax rate, it has been articulated that Breville group has
highest and effective tax rate as 60% followed by Joyce corporation (31.57%) and Accent group
(27.77%) (Annual report of Accent group, 2016).
13. Commenting on deferred tax assets and liability
Deferred tax asset and liabilities are directly recognized with temporary variations at
expected tax rate and applied during recovery of assets and settling liabilities on basis of tax rate
which are enacted. Generally deferred tax liability or asset arises through initial recognition of
particular asset or liability's goodwill in transaction which is not replicated as business
combination during transaction (Kvaal, 2018). It neither impacts accounting nor taxable margins.
Simultaneously, taxable temporary variation is linked with interest in associates, subsidiaries and
joint ventures along with perfect timing of reversal could not be controlled. Furthermore, it is
highly probable that temporary difference would not be reversal in foreseeable future.
14. Increment or decrement in deferred tax asset and liability
2016 2017
%
change
in 2017 2017 2018
%
change
in 2018
Breville group
17

Deferred tax asset 380 0
-
100.00% 0 5 0.00%
Deferred tax Liability 0 912 0.00% 912 3 -99.67%
2016 2017
%
change
in 2017 2017 2018
%
change
in 2018
Joyce group
Deferred tax asset 1110 1307 17.75% 1307 1445 10.56%
Deferred tax Liability 317 262 -17.35% 262 554 111.45%
2016 2017
%
change
in 2017 2017 2018
%
change
in 2018
Accent group
Deferred tax asset 10652 18501 73.69% 18501 22310 20.59%
Deferred tax Liability 7314 13685 87.11% 13685 15447 12.88%
Deferred
tax asset
Deferred
tax liability
2017 2018 2017 2018
Breville group Decrease Increase Increase decrease
Joyce group Increase Increase Decrease Increase
Accent group Increase Increase Increase Increase
15. Calculating cash tax amount
18

Breville group
2017 2018
Total tax provision 21347 23389
Change in deferred tax asset 380 -5
Change in deferred tax liability -912 909
Unleverd cash tax 20815 24293
Accent group
2017 2018
Total tax provision 12072 16918
Change in deferred tax asset -7849 -3809
Change in deferred tax liability -6371 -1762
Unleverd cash tax -2148 11347
Joyce group
2017 2018
Total tax provision 2626 3101
Change in deferred tax asset -197 0
Change in deferred tax liability 55 -1762
Unleverd cash tax 2484 1339
19

16. Calculating cash tax rate
Breville group
2017 2018
Total tax provision 21347 23389
Change in deferred tax asset 380 -5
Change in deferred tax liability -912 909
Unleverd cash tax 20815 24293
EBITA 83142 89789
Cash tax rate 25.04% 27.06%
Accent group
2017 2018
Total tax provision 12072 16918
Change in deferred tax asset -7849 -3809
Change in deferred tax liability -6371 -1762
Unleverd cash tax -2148 11347
EBITA 41424 60918
Cash tax rate -5.19% 18.63%
Joyce group
2017 2018
Total tax provision 2626 3101
Change in deferred tax asset -197 0
20

Change in deferred tax liability 55 -1762
Unleverd cash tax 2484 1339
EBITA 8266 9824
Cash tax rate 30.05% 13.63%
Cash tax rate 2017 2018
Breville group 25.04% 27.06%
Accent group -5.19% 18.63%
Joyce Corporation 30.05% 13.63%
It has been stated that Breville group has higher cash tax rate in year 2018 as 27.06% and
in year 2017 Joyce corporation was having 30.05% respectively (Annual report of Joyce
Corporation, 2017).
17. Reason of differing cash tax rate from book tax rate
Cash tax is considered as tax paid to government authorities such as internal revenue
service and is directly based on amount of income reported on tax return of every year. Further,
the income stated on tax return on every year and stated income is reported and paid cash tax
amount is determined under tax laws which signifies that revenue are increased through
government operations. On the contrary, book tax is replicated as tax reflected in financial
statements of organizations. Generally investors and lenders use these financial statements for
understanding financial health of private and public companies (Duan and et.al., 2018). The
books of account will trace tax expense for total potential of liability of cash tax along with
particular proportion which will be paid in later year.
Furthermore, temporary difference signifies items of income or expense which is stated
as tax return in different duration as compared to book purpose. Over time, both tax and book
amount will be equal. However, permanent difference is just vice versa as difference among tax
and book income which impacts only one.
21

CONCLUSION
From the above study it had been concluded that corporate accounting plays significant
role in interpreting financial information. It had shown that retailing industry is having various
ups and down which could be resolved by following appropriate strategy.
22

REFERENCES
Books and Journals
Banks, L., Hodgson, A. and Russell, M., 2018. The location of comprehensive income
reporting–does it pass the financial analyst revision test?. Accounting Research
Journal. 31(4). pp.531-550.
Duan, T. and et.al., 2018. The burden of attention: CEO publicity and tax avoidance. Journal of
Business Research. 87. pp.90-101.
Kvaal, E., 2018. Discussion of ‘Making Deferred Taxes Relevant’. Accounting in Europe. pp.1-
11.
Veltri, S. and Ferraro, O., 2018. Does other comprehensive income matter in credit-oriented
systems? Analyzing the Italian context. Journal of International Accounting, Auditing and
Taxation. 30. pp.18-31.
Online
Annual report of Accent group. 2017. [Online]. Available through
<http://onlinereports.irmau.com/2017/RCG/28/#zoom=z>.
Annual report of Accent group. 2018. [Online]. Available through
<http://onlinereports.irmau.com/2018/AX1/>.
Annual report of Breville. 2017. [Online]. Available through
<http://www.annualreports.com/HostedData/AnnualReports/PDF/ASX_BRG_2017.pdf>.
Annual report of Breville. 2018. [Online]. Available through
<https://hotcopper.com.au/threads/ann-annual-report-2018.4471835/.
Annual report of Joyce corporation. 2017. [Online]. Available through
<http://joycecorp.com.au/index.php/download/annual-report-2017/>.
Annual report of Joyce corporation. 2018.[Online]. Available through
<http://joycecorp.com.au/index.php/download/annual-report-2018/>.
23

APPENDIX
Breville group- 2018
24

25

Breville group- 2017
26

27

28

29

Accent Group 2017
30

31

32

33

Accent group 2016-17
34

35

36

37

Joyce Corporation 2016-
38

39

Joyce corporation 2017-2018
40

41