Implication of Taxation Rules and Regulations on Monash IVF Group Ltd

This report provides an in-depth analysis of the taxation rules and regulations impacting Monash IVF Group Ltd. It examines the company's financial statements, including common stock, contributed capital, accumulated profit, and retained earnings. The report evaluates the company's income tax expenses, deferred tax liabilities, and current tax assets, comparing tax expenses to tax payments. It investigates the differences between accounting and taxation rules, particularly regarding revenue, expenses, and depreciation. The analysis explores the impact of deferred tax liabilities and assets, and how they relate to future tax obligations. Furthermore, the report compares income tax expenses to income tax payable, and income tax expenses in the income statement to income tax paid in the cash flow statement. Finally, it discusses the treatment of tax recording in the company's books, highlighting the interesting and surprising aspects of tax recording, and the difficulties faced. The report refers to AASB-112 and annual reports, including cash flow statements, balance sheets, and income statements to support its findings.

RUNNING HEAD: Implication of taxation rules and regulations on Monash IVF Group Ltd
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Name of the student-
Topic- Implication of taxation rules and regulations on Monash IVF Group Ltd
University name

Implication of taxation rules and regulations on Monash IVF Group Ltd
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Table of Contents
Answer to question-1.............................................................................................................................3
Answer to question-2.............................................................................................................................5
Answer to question no-3........................................................................................................................5
Answer to question no-4........................................................................................................................7
Answer to question no-5........................................................................................................................8
Answer to question no-6........................................................................................................................9
Answer to question no-7........................................................................................................................9
References...........................................................................................................................................12
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Implication of taxation rules and regulations on Monash IVF Group Ltd
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This report has focused on evaluating taxation rules and regulations of Monash IVF Group
Ltd.
Answer to question-1
The annual report of Monash IVF Group Ltd has been analysed with a view to evaluate
the stock and contributed capital of company
 Common stock
 Contributed capital
 Accumulated profit
 Retained earnings and reserve.
It is observed that common stock is the amount of money given by shareholders for the
ownership. On the other hand, Contributed capital is also the same amount but not
redeemable unit and unless company is wind up.
Accumulated profit is the overall profit collected by the company since then. Retained
earnings and reserve is the amount of profit which has not distributed by company to its
stakeholders (Blouin and Robinson, 2014).
Equity (Amount in dollar
million) ($M)
2017 2016
Common stock 428 423

Implication of taxation rules and regulations on Monash IVF Group Ltd
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Accumulated profit (113) (104)
Retained earning 161 161
Total equity 287 288
Discussion on the retained earning
Company has maintained stable retained earnings in both years. However, the main objective
of not plugging back of this capital in its business is based on the return on capital employed
of company. Monash IVF Group Ltd is not finding a good reason to expand its business as
company is having sluggish market conditions.
Answer to question-2
It is considered that tax is the amount which is charged on the profited of company.
Monash IVF Group Ltd has paid tax amount AUD $ 12 million. Company has Monash IVF
Group Ltd has maintained stable tax payment since last two year which is good indicator for
company (Brondolo, 2009)
Particular(AUD $ in million) 2015 2016
Income tax expenses 12 12
Company has to adopt proper tax planning process with a view to reduce the tax payment. In
addition to this, company has increased deferred tax liabilities by AUD $ 1 million.

Implication of taxation rules and regulations on Monash IVF Group Ltd
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Answer to question no-3
After evaluating the annual report of Monash IVF Group Ltd, it is observed that tax
expenses shown in the books of account of company is not same as the amount computed by
charging 30% tax on the profit of company. It is considered that Monash IVF Group Ltd has
paid tax AUD $ 12 million. On the other hand, if tax rates time tax payment is computed it
would be around 30% % net profit i.e. 41* 30%= AUD 12.3. However, this is very less
amount of tax differences. It has aroused due to difference between the accounting and
taxation rules and regulations (Monash IVF Group Ltd, 2017)
Explain why this
 It is considered that treatment of charging tax on the earned profit is different in
accounting and income tax rules and regulations.
 The tax expenses shown in the financial statement of company would be based on the
income tax rules and regulations. On the other hand, tax rate computed on the net
profit would be based on the profit computed as per the rule and regulations.
There are main two reasons of differences. First is related to recording of revenue and
expenses in profit and loss account as per the accounting and income tax rules and
regulations. As there is different recording of expenses and revenue, such as charging
depreciation, recording donation and bad debts as per the accounting and income tax rules
and regulation as per AASB-122.
Answer to question no-4
The annual report of Monash IVF Group Ltd has shown that it has recorded deferred tax
liabilities amount AUD $ 2 million in its non-current liabilities. This deferred tax amount

Implication of taxation rules and regulations on Monash IVF Group Ltd
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needs to be recognized and carried forward to the extent that is reasonably sufficient for the
future taxable income. It is analysed that Monash IVF Group Ltd has paid lower tax as per
its income tax rules and regulation as compared to its tax computation based on the
accounting rules. .therefore, payment beyond that has been kept at the deferred tax liabilities.
It reflects that company may need to pay this tax payment in future if taxation rules and
regulations policies changes (Brigham and Ehrhardt, 2013).
On the other hand, if Monash IVF Group Ltd pays higher tax as per the income tax rules as
per the accounting rules and regulations then it needs to charge in its books of account of
company.
Particular (AUD $ million) 2017 2016
Deferred tax assets 2 1
Answer to question no-5
Current tax assets and other income tax payable by company
With the ramified changes in taxation rules and regulations, company needs to book taxation
payment entries in its books of account to keep the record of the tax payment. In Monash IVF
Group Ltd, company was having AUD $ 10 million tax payable which it has recorded in its
current liabilities section. It reflects that company may need to pay current tax to government
in near future (Gitman, Juchau and Flanagan, 2015).
Deferred tax payment of Monash IVF Group Ltd in 2017 is zero. Company has paid all of its
deferred tax to government AUD $ 10 million in 2016.

Implication of taxation rules and regulations on Monash IVF Group Ltd
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Particular(AUD $ in million) 2016 2017
Income tax payable 10 0
Why income tax expenses is not same as the income tax payable
It is evaluated that income tax payable of company was AUD $ 10 million in 2016
which has gone down to zero. It is the amount of tax which would be payable by Monash IVF
Group Ltd in near future. On the other hand, income tax expenses are the amount charged on
the profit and loss account of company and would be deducted from its net profit. Income tax
payable includes all the tax payment including for all the years. In addition to this, income tax
expenses are the charged only on the current year profit of company.
Answer to question no-6
Is the expenses shown in the income statement is not same as the income tax paid in its cash
flow statement? If not
After evaluating the annual report of Monash IVF Group Ltd, it is considered that income tax
expenses shown in the income statement is not same as the income tax paid in its cash flow
statement (Evers, Meier, and Spengel, 2014).
Why are the differences?
Cash flow statement reflects the cash inflow and outflow of money in the current year
irrespective of the fact that it relates to current year or previous year. The cash flow of
income tax reflects the tax payment of company irrespective of the fact that it relates to
current year or previous year. The income tax shown in the cash flow statement is zero. It

Implication of taxation rules and regulations on Monash IVF Group Ltd
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reflects that in current year company has paid zero amount of tax. On the other hand, income
tax expenses shown in the profit and loss account is the amount of tax charged on the profit
and loss account. The current tax expenses of Monash IVF Group Ltd is AUD $ 12 million. Now
in the end, it could be inferred that each and every statement of company has its own
recording process and values. These documents serve their own particular objects. There is
zero amount of tax payment in the current year of Monash IVF Group Ltd. Therefore, there is
no amount shown in the cash flow statement of company.
Answer to question no-7
Treatment of recording of tax in the books of account of Monash IVF Group Ltd
Interesting thing about the recorded its entire tax amount
Recording of income tax in the books of account of company is based on the taxation rules
and regulations given under AASB-112. It is considered that entries for tax recording are
done in the profit and loss account, balance sheet and cash flow statement. The main
interesting thing about the recording of tax is related to contradiction of tax computation as
per the accounting rules and regulations and taxation rules and regulations (Monash IVF
Group Ltd, 2017).
Surprising thing about the recorded its entire tax amount
The main surprising thing about recording of tax in the books of Monash IVF Group Ltd is
related to corporate governance recording and income tax rules. Company needs to block
high amount in its deferred tax liabilities in case its tax computation is low as per the
accounting rules while comparing the same with the taxation rules. In addition to this,

Implication of taxation rules and regulations on Monash IVF Group Ltd
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Monash IVF Group Ltd can never have deferred tax assets and deferred tax liabilities at the
same.
Difficulty in recorded the entire tax amount
Monash IVF Group Ltd has complex tax recording structure. The main problem arise when
the income tax expenses is not same as per the tax rate income computation of company.
Monash IVF Group Ltd has found difficult to bifurcate tax payment as per the rule
and regulation given under AASB-112.
New insight about the company account for the income tax
The main insight about the recording of tax in the books of account is related to
changing taxation rules and regulations. Company needs to be ready and alert for the taxation
rules and regulation. Company might face cumbersome and complicated process while
recording of taxation rules and regulation in its books of account.

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References
Ballas, A.A., Skoutela, D. and Tzovas, C.A., 2010. The relevance of IFRS to an emerging
market: evidence from Greece. Managerial Finance, 36(11), pp.931-948.
Blouin, J.L. and Robinson, L.A., 2014. Insights from academic participation in the FAF's
initial PIR: The PIR of FIN 48. Accounting Horizons, 28(3), pp.479-500.
Brigham, E.F. and Ehrhardt, M.C., 2013. Financial management: Theory & practice.
Cengage Learning.
Brondolo, J., 2009. Collecting taxes during an economic crisis: challenges and policy
options (No. 2009-2017). International Monetary Fund.
Evers, M.T., Meier, I. and Spengel, C., 2014. Transparency in Financial Reporting: Is
Country-by-Country Reporting suitable to combat international profit shifting?.
Gitman, L.J., Juchau, R. and Flanagan, J., 2015. Principles of managerial finance. Pearson
Higher Education AU.
Monash IVF Group Ltd, 2017, annual report, Retrieved on 22st January, 2017 from
http://ir.monashivfgroup.com.au/Investor-Centre/?page=Annual-Reports

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Appendix
MONASH IVF GROUP LTD (MIS) Cash Flow Flag BALANCE SHEET
Fiscal year ends in June. AUD in millions
except per share data.
2013-
06
2014-
06
2015-
06
2016-
06
2017-
06
Assets
Current assets
Cash
Cash and cash equivalents 9 10 8 4
Total cash 9 10 8 4
Receivables 3 3 4 5
Other current assets 3 4 5 6
Total current assets 15 17 18 15
Non-current assets
Property, plant and equipment
Gross property, plant and equipment 27 36 40 45
Accumulated Depreciation -18 -21 -25 -29
Net property, plant and equipment 9 14 15 17
Equity and other investments 1 0 1
Goodwill 198 229 229 229
Intangible assets 22 22 25 26
Deferred income taxes 3 0
Other long-term assets 0 0 0 0
Total non-current assets 232 267 270 272
Total assets 246 284 288 287
Liabilities and stockholders' equity
Liabilities
Current liabilities
Short-term debt 0
Accounts payable 1 2 4 4
Deferred income taxes 1 3 10 0
Other current liabilities 22 27 23 21
Total current liabilities 24 32 36 25
Non-current liabilities
Long-term debt 95 106 95 95
Deferred taxes liabilities 1 2
Other long-term liabilities 2 1 1 2
Total non-current liabilities 97 108 96 99
Total liabilities 122 140 133 124
Stockholders' equity
Common stock 423 428 428 428

Implication of taxation rules and regulations on Monash IVF Group Ltd
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Retained earnings -161 -161 -161 -161
Accumulated other comprehensive income -137 -123 -113 -104
Total stockholders' equity 125 144 155 164
Total liabilities and stockholders' equity 246 284 288 287
Income statement
MONASH IVF GROUP LTD (MIS) Cash Flow Flag INCOME STATEMENT
Fiscal year ends in June. AUD in millions
except per share data.
2013-
06
2014-
06
2015-
06
2016-
06
2017-
06
TT
M
Revenue 114 122 157 155 155
Cost of revenue 11 13 14 13 13
Gross profit 103 109 142 142 142
Operating expenses
Sales, General and administrative 53 59 78 79 79
Other operating expenses 28 17 18 18 18
Total operating expenses 81 77 97 98 98
Operating income 22 32 45 45 45
Interest Expense 25 5 5 3 3
Other income (expense) 1 3 0 0 0
Income before taxes -2 31 41 41 41
Provision for income taxes -7 9 12 12 12
Net income from continuing operations 5 21 29 30 30
Other -2
Net income 3 21 29 30 30
Net income available to common
shareholders 3 21 29 30 30
Earnings per share
Basic 0.02 0.09 0.12 0.13
0.1
3
Diluted 0.02 0.09 0.12 0.13
0.1
3
Weighted average shares outstanding
Basic 126 231 235 235 235
Diluted 126 231 235 237 237
EBITDA 26 39 50 49 49

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