Corporate Accounting Report: Gazal Corp's Cash Flow and Balance Sheet

This report provides a comprehensive analysis of Gazal Corporation Limited's financial statements, focusing on the cash flow statement, balance sheet, and other comprehensive income statement. The analysis includes a breakdown of cash flow activities (operating, investing, and financing), a comparative analysis of cash flow categories, and an examination of items recorded in the comprehensive income statement, such as exchange differences and revaluation of assets. Furthermore, the report delves into the accounting treatment of corporate income tax, comparing tax expenses across different years and assessing the relationship between accounting income and taxable profits. The tax treatment of Gazal Corporation Limited is also examined, with a focus on its tax consolidated group structure and the allocation of current and deferred tax. The report concludes with a summary of key findings and references to relevant accounting standards and literature.

CORPORATE
ACCOUNTING

The organization that has been selected for analysis of its
annual report in context of its cash flow statement and
balance sheet is Gazal Corporation limited.
 Gazal corporation limited is a public listed apparel brand
company listed on ASX.
 Specialization of company is in building and developing
national and international brands in the fashion
accessories and apparel industry.

ANALYSIS OF CASH FLOW
STATEMENT:
 Items under cash flow from financing activities include proceed
from share issue, proceed from borrowing, dividend paid and
repayment from borrowing.
 Items reported under cash flow from investing activities include
purchase of property, equipment and plant, purchase of
intangibles, proceeds from sale of building, equipment and plant,
proceeds from sale of discontinued operations, income tax paid
non discontinued operations and dividend from joint ventures
(Collier 2015).
 Items reported under cash flow from operating activities include
payment from customers, payment to suppliers, interest received,
income tax paid and interest and other cost of finances paid.

COMPARATIVE ANALYSIS OF CASH FLOW CATEGORIES
OF GAZAL CORPORATION LIMITED

ANALYSIS OF OTHER COMPREHENSIVE INCOME
STATEMENT
 The items that have been recorded in the comprehensive income
statement involves profit reported after tax, items that are
reclassified and items that are not reclassified subsequently to the
profit and loss along with total income for the period.
 The profit and loss statement of company depicts the performance
in terms of net loss or gain realized at the end of any reporting
period. However, the statement of comprehensive income includes
the loss and gains that are unrealized. All the items of income and
expenses are recorded in the profit and loss statement except those
that are recognized in the statement of comprehensive income.

ANALYSIS OF OTHER COMPREHENSIVE INCOME
STATEMENT
 Exchange difference is the difference that occurs due to the
translation of a given number of currencies in one unit to another
currency at different exchange rates.
 Income tax on the items of comprehensive income is the amount
of tax that is paid by entity on items such as expenses, revenue,
losses and gains that is mentioned after excluding the net income
reported on income statement.
 Revaluation of land and building at fair value means that such
assets are reclassified at the fair value where the date of
revaluation is less subsequent to accumulated depreciation
impairment.

ANALYSIS OF ACCOUNTING FOR CORPORATE INCOME
TAX
 The income tax expense is reported in the income statement of
Gazal Corporation limited and the amount of income tax expense
recorded in the financial year 2017 and 2016 stood at $ 1501 and $
1550.
 Income tax expense recorded in year 2015 stood at $ 914. It is
suggested by figure that income tax expense has increased initially
and it declined subsequently.

ANALYSIS OF ACCOUNTING FOR CORPORATE INCOME
TAX
 Total amount of accounting income reported by company in year 2017
and 2016 stood at $ 1223000 and $ 58789000 respectively.
 The taxation rate when applicable to the accounting profit reported
comes to $ 3669 (30% of $ 1223000) and $ 17637 (30% of $
58789000).
 From the figures, it can be inferred that the amount if corporate tax
paid by reporting entity in both the years is less than the accounting
income times the tax rate. This is so because the amount of accounting
profits and taxable profits are significantly different (Powers et al.
2016).

TAX TREATMENT OF GAZAL CORPORATION LIMITED
 The treatment of tax in the financial statements of Gazal Corporation
limited seems to be quite interesting as there is proper and segregated
disclosure of the accounting treatment relating to income tax
 a tax consolidated group has been formed by Gazal Corporation limited
that was effective from 1st July, 2003 and the group is head entity of the
tax consolidated group.
 As per the agreement, the current tax is allocated to the members
of tax consolidated group along with allocating the deferred tax to
the members of tax consolidated group (Gazal.com.au 2018). ).
Such allocations are on done in accordance with the principles of
AASB 112 Income taxes.

REFERENCES LIST:
 Gazal.com.au. (2018). Gazal. [online] Available at:
http://www.gazal.com.au/asx_announcements.html [Accessed 23 May 2018].
 Collier, P.M., 2015. Accounting for managers: Interpreting accounting
information for decision making. John Wiley & Sons.
 Dagwell, R., Wines, G. and Lambert, C., 2015. Corporate accounting in
Australia. Pearson Higher Education AU.
 Oxner, K.M., Oxner, T.H. and Phillips, A.D., 2018. Impact of the Tax Cuts
and Jobs Act on Accounting for Deferred Income Taxes. Journal of
Corporate Accounting & Finance, 29(2), pp.12-21.
 Powers, K., Robinson, J.R. and Stomberg, B., 2016. How do CEO incentives
affect corporate tax planning and financial reporting of income
taxes?. Review of Accounting Studies, 21(2), pp.672-710.