Corporate Accounting Assignment

Corporate Accounting

Assignment ( 35 Marks )

Objectives

This assessment item relates to the course learning outcome 4: Analyse various aspects of disclosure and performance from a company’s annual report.

Step 1 :15 Marks

In the file “Find Your Company” you will find the listed company you have been given for this course. Complete this assignment for the company you have been given. Please be careful to use the listed company you have been given. Your assignment will not be marked if you use a different company to the one you have been given; and you will be asked to resubmit your assignment using the right company.

Go to the website of your company, by clicking on the URL next to your company in the list of companies in the file “Find Your Company”. Then go to the Investor Relations section of the website. This section may be called, “Investors”, “Shareholder Information” or similar name.

In this section, go to your firm’s annual reports and save to your computer your firm’s latest annual report. For example, these may be dated 30 June 2012 or 31 March 2012. Do not use your firm’s interim financial statements or their concise financial statements.

Within your firm’s latest annual report, find its balance sheet.

Tip: Your firm’s balance sheet may be called a range of different names, such as Consolidated Statement of Financial Position.

From your firm’s balance sheet, list each item of equity and write your understanding of each item. Make sure you read carefully any footnotes for each item of equity and also look at your firm’s Statement of Changes in Equity. Also discuss any changes in each item of equity for your firm over the past year.

Were you able to help each other understand the aspects of each other’s equity in your firms’ balance sheets? Why or why not? What remaining questions do you have about your firm’s equity? What insights have you gained?

Submit the following for Step 1:

1. Your firm’s latest annual report (either as a pdf or as a link to the specific page on your firm’s website that has your firm’s latest annual report).

2. A list of each item of equity of your firm (name and amounts for the past two years) and your description (in your own words) of what each item is.

3. A description of your discussions about the items of equity.Did these discussions help you understand each item of your firms’ equity: if so, why; if not, why not? … were you able to help othersunderstand each item in theirfirm’s equity: if so, why; if not, why not?

Step 3:20 Marks

What is your firm’s tax expense in its latest financial statements? Is this figure the same as the company tax rate times your firm’s accounting income? Explain why this is, or is not, the case for your firm.

Tip: Company tax rates are: Australia (30%), New Zealand (2012: 28%; 2011 & 2010: 30%) and UK (2012 & 2011: 26%; 2010: 28%).

What do you think accrual accounting is? How is the concept of accrual accounting relevant to tax-effect accounting?

Does your company use tax-effect accounting? Why or why not?

Is your company’s tax expense in their income statement the actual tax they paid to the Government that year? Why or why not? What does the ‘tax expense’ item in your firm’s income statement mean to you?

Does your firm have tax assets or tax liabilities? If so, what are their amounts in your firm’s financial statements? What do these amounts represent? What do your firm’s tax assets or tax liabilities mean to you?

Please ensure you read the relevant footnotes of your firm’s financial statements carefully and include information from these footnotes in your answer.

What do you find interesting, confusing, surprising or difficult to understand about the treatment of tax in your firm’s financial statements? What new insights, if any, have you gained about how companies account for income tax as a result of examining your firm’s tax expense in its accounts?

How to do well in your assignment

Please adopt a personal style, using the words ‘I’ and ‘me’. It is not necessary to adopt a formal, ‘academic’ style of writing for this assignment. I am interested in you communicating clearly your understanding and developing questions about the material in the assignment.

This assessment is an individual assignment and is to be submitted online. Please submit your Assignment on Moodle as a Word document (along with a pdf or link to your firm’s latest Annual Report).

When preparing your assignment, please refer to the assessment criteria listed below as well as to any further advice I may post on the course website.

Assignment Criteria

Step 1

Submitted correct annual report for your company

1

Insightful description of each item of your firm’s equity – indicating a degree of understanding of what each item is

7

Describe your understanding of each item of your firm’s equity, and supported your emerging insights and questions about how companies account for equity

6

Well communicated and clear presentation

1

Total

15

Step 2

Clear description of your firm’s income tax expense

1

Insightful explanation of whether, and if so why, your firms’ income tax expense differs from the corporate tax rate times accounting income

1

Accrual accounting – what it is

1

Accrual accounting – relevance to tax effect accounting

1

Why or why not your company uses tax-effect accounting

1

Tax expense vs actual tax paid

3

What the item ‘tax expense’ means to you

3

Tax assets/liabilities – identify and meaning

3

Describe how your discussions with other students in the course (and also possibly with staff, work colleagues, friends and family) helped your understanding of your company’s income tax, and supported your emerging insights and questions about how companies account for income tax

5

Well communicated and clear presentation

1

Total

20

Grand Total

35