Corporate Social And Environmental Report -Myassignmenthelp.Com

Question: Discuss About The Corporate Social And Environmental Report? Answer: Introducation The annual report of Aveo Group Stapled has been analysed and it is found that company has increased its equity capital proportion. Equity capital of company is accompanied by the contributed equity, retained earnings and distributable profit. Discussion of its equity capital Company has reduced its reserve to AUD $ -33.4 which is not good indicators for the business. However, company has plugged back its reserve in its business (Aveo Group Stapled, 2017). Equity (Amount in million) 2017 2016 Contributed equity 1262.6 1178 Reserve (33.4) 122.3 Retained earning 121.5 (144.4) Total equity 1350 1156 The total tax expenses of Aveo Group Stapled is AUD $ 54.6 million which is 23% higher as compared to last year tax payment. This tax payment has increased due to increase in the overall profit of company. Particular(AUD $ in million) 2017 2016 Income tax expenses 54.6 44.9 However, Aveo Group Stapled has increased its tax deductible expenses by increasing the debt funding and interest payment on it. The annual report of Aveo Group Stapled has reflected that tax expenses shown in the income statement is not same as the amount computed based on the tax rate times on its income. Aveo Group Stapled has paid 54.6 AUD $ million tax in 2017 which consists of entire tax payment including provision for tax implication. The tax rate times on income of Aveo Group Stapled is computed by using accounting income *30% tax rate i.e. 163.1 AUD $ *30%= 48.9 Reason for tax differences between tax rate times on income of Aveo Group Stapled and tax shown in the income statement The tax amount shown in the profit and loss accounting is computed based on the taxation rules and regulation as per the AASB-122. On the other hand, taxation rate is computed by using accounting income *30% tax rate i.e. AUD $ The main reason for the differences between tax rate times on income of Aveo Group Stapled and tax shown in the income statement is related to deductible expenses and other payment which could be minus from the profit and loss account as per the taxation rules and regulation as per the AASB-122. Recording of depreciation amount, interest payment and other expenses are recorded differently as per the accounting and income tax rules and regulations (Abdallah, 2016). The annual report of Aveo Group Stapled has shown that deferred tax payment of company is AUD $ 54.5 which is 100% higher in comparison with the last year. This deferred tax amount should be carried forward and deducted to the limit that is reasonably sufficient for its future taxable income against which this deferred tax assets would be realised (Aveo Group Stapled, 2017). It is considered that accounting and taxation income are not same which resulted to deferred tax assets and liabilities. If company finds that due to difference between accounting4 and taxation rules, it needs to pay higher tax then the excess tax payment would be recorded in the deferred tax assets. On the other hand, if it the tax payment is lower then the remaining amount would be shown in the deferred tax liabilities of the company. Aveo Group Stapled has deferred tax liabilities which reflect that company might pay more tax to government. Particular (AUD $ million) 2017 2016 Deferred tax liabilities 54.5 27 Current tax assets and other income tax payable by company The current tax payable of Aveo Group Stapled is AUD $ 5.8 in 2017. The income tax payable would be shown on the current liabilities side of company as this amount would be paid in the near future (Gray, Owen and Adams, 2016). Particular(AUD $ in million) 2017 2016 Income tax payable 5.8 - Why income tax expenses is not same as the income tax payable The income tax expenses shown in the profit and loss account is the amount charged on the profit of the current year. Income tax payable is the accumulation of the outstanding tax which company will pay in future. Is the income tax expense shown in the income statement same as the income tax paid shown in the cash flow statement? If not The income tax payment in its cash flow statement is zero i.e. company has not paid tax in this current year. On the other hand, tax expenses shown in its income statement is AUD $ 54.6. Cash flow statement shows the amount of cash inflow and outflow in the current year. The cash flow of income tax shown in the CFS of the company includes all the tax payment irrespective of the fact, whether it is related to present, past or future period. On the other hand, income tax shown in the income statement is related to tax charged on the current year. Therefore, it could be inferred that due to difference in tax recording in both statement, there is difference in tax payment (Hoyle, Schaefer and Doupnik, 2015). Treatment of tax Interesting thing about the recorded its entire taxation-law Tax recording differ in the financial statement due to the differences between accounting and income tax provision. Surprising thing about the recorded its entire tax amount Company cannot have deferred tax assets and deferred tax liabilities in its books of account at the same time. Confusing thing in recording of income tax amount The main confusing thing is related to implication of the tax provision and amendment which make taxation rules and regulations cumbersome for the stakeholders. Difficulty to record the entire tax amount Due to change in taxation rules and uncertainty of the tax provisions, company have to block high amount in its deferred tax assets and liabilities. Insight companies account for income tax as a result of examining your firms tax expense in its accounts The main insight which I have gained is related to recording of the tax deductible expenses which differ as per the accounting rules and regulation with the comparison of income tax rules and AASB-122 (Lubbe, Modack and Watson, 2014). References Abdallah, W. (2016). Accounting Finance, and Taxation in the Gulf Countries. Springer. Aveo Group Stapled, 2017, annual report, Retrieved on 29th November, 2017 from https://www.aveo.com.au/wp-content/uploads/2017/09/AVEO-2017-Annual-Report.pdf Gray, R., Owen, D. and Adams, C., 2016.Accounting accountability: changes and challenges in corporate social and environmental reporting. Prentice Hall. Hoyle, J.B., Schaefer, T. and Doupnik, T., 2015.Advanced accounting. McGraw Hill. Lubbe, I., Modack, G. and Watson, A., 2014. Financial Accounting GAAP Principles. business-law.