Corporate Accounting Analysis: ASX Listed Company Comparison

This assignment analyzes the corporate accounting of three publicly listed companies on the Australian Securities Exchange (ASX). The analysis includes a detailed examination of equity and liability alterations over a three-year period, providing percentage changes and reasons for significant shifts. The report investigates debt-equity positions, cash flow statements, and items of other comprehensive income, explaining why certain items are not reflected in the income statement. Furthermore, the assignment calculates and compares effective tax rates, deferred tax assets and liabilities, and cash tax amounts across the selected companies. The conclusion summarizes the role of corporate accounting in interpreting financial information, highlighting the importance of strategic decision-making in the retail industry. The assignment aims to provide insights into the financial performance and accounting practices of the chosen companies, offering a comparative perspective on their financial health and operational strategies.

Corporate Accounting
OVERVIEW

Listing item of equity with its alteration over last three years
 % change in 2017: (2017 – 2016)/ 2016 [Total Equity of Breville
group]
 % change in 2017: (2017 – 2016)/ 2016 [Total Equity of Joyce
Corporation]
 % change in 2017: (2017 – 2016)/ 2016 [Total Equity of Accent group]

Listing item of liability with its change over 3 years
% change in 2017: (2017 – 2016)/ 2016 [Total Equity of Breville group]
Reason for change in liability in 2018
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

Listing item of liability with its change over 3 years
 % change in 2017: (2017 – 2016)/ 2016 [Total Equity of Joyce
Corporation]
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)

Listing item of liability with its change over 3 years
 % change in 2017: (2017 – 2016)/ 2016 [Total Equity of Accent group]
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

Debt Equity position
(Brevillie group)
27.81%
72.19%
Brevillie group
Debt Equity

Debt equity position (Joyce corporation)
30.38%
69.62%
Joyce corporation
Debt Equity

Debt equity position (Accent group)
24.56%
75.44%
Accent group
Debt Equity

Cash flow statement
 Cash flow of each category (Operating, Investing and
Financing)
 % change in 2017: (2017 – 2016)/ 2016 [Total Equity of
Breville group]
 % change in 2017: (2017 – 2016)/ 2016 [Total Equity of Joyce
corporation]
 % change in 2017: (2017 – 2016)/ 2016 [Total Equity of Accent
group]

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.

Other comprehensive income
 % change in 2017: (2017 – 2016)/ 2016 [Total Equity of Breville group]
 Joyce does not generate other comprehensive income
 % change in 2017: (2017 – 2016)/ 2016 [Total Equity of Accent group]

Effective tax rate
 Income tax expense/ Earnings before tax
 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%)

Deferred tax asset and liability
Deferr
ed tax
asset
Deferr
ed tax
liabilit
y
2017 2018 2017 2018
Breville group Decrea
se
Increas
e
Increas
e
decrea
se
Joyce group Increas
e
Increas
e
Decrea
se
Increas
e
Accent group Increas
e
Increas
e
Increas
e
Increas
e

Cash tax amount and cash tax rate
 Unlevered cash tax= Total tax provision + Change in deferred tax
asset + Change in deferred tax liability
 Cash tax rate= (Total tax provision + Change in deferred tax asset +
Change in deferred tax liability)/ Earnings before interest and tax
Cash tax rate 2017 2018
Breville group 25.04% 27.06%
Accent group -5.19% 18.63%
Joyce corporation 30.05% 13.63%

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.