Advanced Financial Accounting And Reporting -Myassignmenthelp.Com

Question: Discuss About The Advanced Financial Accounting And Reporting? Answer: Introducation Issued capitals are the capital that has already been issued to shareholders of company and it represents the share of stocks that has been offered for sale to investors. Shares that are issued correspond to accounting of subscribed share capital. Retained earnings are the earnings that are reinvested by company into the business and they are not distributed to shareholders by way of dividends (Henderson et al., 2015). Reserves are one of the components of shareholder equity and it appears on the liabilities side of balance sheets. Tax expenses of Cleanaway waste management limited as mentioned in the latest annual report for the financial year 2017 and 2016 stood at $ 36.5 million and $ 18.5 million respectively. The accounting income of company as depicted in the annual report of Cleanaway waste management limited for both the financial year 2017 and 2016 is recorded at $ 109 million and $ 61.6 million respectively. Corporation tax rate that is applicable to company is 30%. Now, the accounting income times the company tax rate for both the years stood at ($ 109* 30%= 32.7) and ($ 61.6* 30%=18.48). On other hand, income tax expenses for both the years stood at $ 36.5 million and $ 18.5 million respectively. From the computation of the above figures, it can be seen that the income tax expenses is not same accounting income times the taxation rate. Income tax expenses is more than accounting income tax expenses and the differences in these value is attributable to the fact that the accounting treatment of taxation is different from that of accounting income (Warren Jones, 2018). The accounting treatment of taxation and financial accounting are different that led to differences between the acco unting income times the taxation rate and income tax expenses. Accounting for income taxation is regarded as difficult because of difference between tax accounting treatment and financier accounting treatment (Cortesi et al., 2015). Cleanaway waste management limited has reported net deferred tax assets under the head noncurrent assets and the total amount reported on $ 89.5 million in financial year 2017 and 110.3 in financial year 2017. Organization has reported deferred tax assets in their balance sheet because amount of taxation recorded in the income statement is lower than the tax that is to be paid to taxation authority. Presence of deferred tax assets is indicative of the fact that company might receive tax benefits in future. The income tax payable by company in the financial year 2017 and 2016 is recorded at $ 16.7 million and 10.7 million. There has increase in income tax payable in the current financial year and there are no current tax assets that are held by company in both the financial year. Income tax payable is the amount of tax that is due and must be paid and income tax expense is the estimation of the amount of tax that is owed by company as per the taxation standard. Income tax payable is the liability of company that should be actually paid and income tax expense is the estimation appearing on the income statement (Hoskin et al., 2014). The income tax paid as stated in the cash flow statement for the financial year 2017 and 2016 is recorded at ($ 8.6) million and $ 7.4 million respectively. Financial year 2017 recorded income tax paid by amount ($ 8.6) million and there was tax refunding of $ 7.4 million. On other hand, income tax expense recorded in the both the years as depicted in the income statement stood at $ 36.5 million and $ 18.5 million respectively. It is clear indicated by the figure that income tax expenses is not same as income tax paid. Income tax paid is the actual amount of tax that has been paid by organization, whereas income tax expenses is the estimation of the amount of taxation that is required to be paid to government or taxation authority. Analysis of annual report of Cleanaway waste management limited provides users with the knowledge about different types of taxation and the treatment in different account. All the entry relating to taxation has been presented in the annual report in a segregated way that assist users in clear and proper understating of the concept of taxation. Deferred tax assets and deferred tax liabilities have been explained in separate section along with its components (Hoyle et al., 2015). Net profit after the income tax that are attributable to equity holders are used for the computation of basic earnings per share. Moreover, the computation of share based payment expense is done by deducting net taxation. Franking credits have also been explained in relation to treatment for taxation. Offsetting of deferred tax assets and deferred tax liabilities are done when it is enforceable legally and is related to current taxation that is levied by taxation authority. Settlement of current tax liabilities and assets is done by organization on a net basis or else there will be simultaneous realization of tax assets and liabilities (Wong Yeung, 2014). Amounts that are directly recognized in equity incorporate the deferred and current tax balances. The particular aspect of tax position of the group is currently being viewed by taxation authority of New Zealand References list: Cortesi, A., Tettamanzi, P., Scaccabarozzi, U., Spertini, I., Castoldi, S. (2015). Advanced Financial Accounting: Financial Statement AnalysisAccounting IssuesGroup Accounts. EGEA spa. Henderson, S., Peirson, G., Herbohn, K., Howieson, B. (2015). Issues in financial accounting. Pearson Higher Education A Horton, J. (2018). Advanced Financial Accounting and Reporting: Theory, Practice and Evidence. Routledge. Hoskin, R. E., Fizzell, M. R., Cherry, D. C. (2014). Financial Accounting: a user perspective. Wiley Global Education. Hoyle, J. B., Schaefer, T., Doupnik, T. (2015). Advanced accounting. McGraw Hill Warren, C. S., Jones, J. (2018). Corporate financial accounting. Cengage Learning. Williams, J. (2014). Financial accounting. McGraw-Hill Higher Education. Wong, S. T., Yeung, C. S. (2014). Advanced Financial Accounting. Pearson Education Asia Limi