3.4 Comparison Of Accounting For Income Tax
3.4.1 Disclosure of income tax part in notes to financial statement for each company
AASB 112 para 5 describes the tax base of assets and liabilities is the amount attributed to that asset and liability for tax purpose. According to this standard, we will compare the way of each company applies it and how the companies present it in their notes to financial statements.
1. Cardno Limited presents the detail calculation of income tax by dividing the income tax expense section into three parts:
a. The component of tax expense giving more detailed amount of tax expense and deffered tax expense for current and adjustment amount. However, there is no more explanation about the movements of the …show more content…
It is also elaborate more detailed calculation of total deferred tax expense (benefit) and income tax expense or benefit.
b. Amounts recognised in directly in other comprehensive income
This part discloses accounts impacting the tax income or expense of the company from other comprehensive income. There are two accounts such as foreign operation – foreign currency translation differences and cash flow hedges
c. Movement in deferred tax balances
In this section the movement of deferred tax balance durint this year is disclosed in more detailed amount.
4. Seven west media elaborates taxation section two parts:
In this part, the company describes the accounting policy such as tax expense, tax assets and tax liabilities. Additionally, it is described the tax consolidation, nature of funding arrangements and good and service tax (GST). Subsequently, more detailed calculation of tax expense recognised in profit and loss, reconciliation of tax expense to prima facie tax payable, tax recognised in other comprehensive income and deferred tax asset not recognised.
b. Deferred tax assets and …show more content…
Deferred tax assets
This part merely discloses the movement of deferred tax asset.
d. Deferred tax liability
This part merely discloses the movement of deferred tax liability.
e. Breakdown account of group’s deferred tax asset
This part calculates more detailed of deferred tax of group. The accounts impacted group’s deferred tax assets are property plant and equipment, intangible assets, specific provisions on trade and related party receivable.
f. Breakdown account of company’s deferred tax asset.
Idem with part e, but this part is provided for calculation of company’s deferred tax asset.
Breakdown account of group’s deferred tax liabilities. It is disclosed in this part property, plant and equipment is the only account that creates movement to group’s deferred tax liability.
3.4.2 Compare income tax
The sequences of every company elaborate its income tax details are quite similar. Firstly, every company disclose the total income tax expense / benefit derived from the different between current tax and deferred tax. Then followed by the reconciliation of income tax expense to prima facie tax payable disclosed the calculation of income tax/benefit by increasing or decreasing profit after tax with permanent different accounts. All companies in our group disclose these two details in their notes to financial