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Financial Accounting 2 Essay

1448 words - 6 pages

This assignment is divided into three parts:
Firstly, the table below will explain the level of compliance and quality of disclosure for the key disclosure requirement between two companies.
Then, it will analysis which company provides the better level of disclosures for accounting for income tax.
Finally, a documentation which reflects the team-work performance will also be presented.
AASB | Requirements of the Regulation | Company Analysis--ADQ | Yes/No1 | Company Analysis--EAL | Yes/No1 |
101:54 | Minimum line items on statement of financial position(n) current tax asset/liability(o) deferred tax asset/liability | (n) N/A - ADQ made a loss in previous year(o) DTA disclosed ...view middle of the document...

| Yes | Full disclose in which item is required. | Yes |
112:80 | Components of tax expense may include:(a) current tax expense (CTE)(b) adjustments recognised current tax for prior periods | (a) N/A – ADQ made a loss in previous year(b) adjustments amount disclosedN8. P66 | YesYes | (a) current tax expense disclosed(b) N/A – No adjustments recognized current tax for prior periodsN8. P46 | YesYes |
112:80(c) | The amount of deferred tax expense (income) relating to the origination and reversal of temporary differences | The amount disclosedN8. P66, 67 | Yes | The amount disclosedN8. P46 N16. P52 | Yes |
112:80(d) | The amount of deferred tax expense (income) relating to changes in tax rates. | N/A – No change in tax rateN8. P66 | Yes | N/A – No change in tax rate. N8. P46 | Yes |
112:80 | The amount of benefit from a previously unrecognised tax loss:(e) to reduce current tax expense(f) to reduce deferred tax expense | (e) & (f) N/A - No recognition of previously unrecognized tax losses as a future taxable profit will be available.N8. P66,67 | YesYes | (e) & (f) N/A – No recognition of previously unrecognised tax losses as the tax position of EAL is profitableSCI. P30 N8. P46 | YesYes |
112:80(g) | Deferred tax expense arising from the write-down (WD), or reversal of a previous WD of DTA. | N/A – No change in recognized deductible temporary differences | Yes | N/A – No change in recognised deductible temporary differences | Yes |
112:80(h) | The amount of TE& TI relating to changes in AP and errors that are included in P&L. | N/A – No significant change in AP and errors | Yes | N/A – No significant change in AP and errors | Yes |
112:81(a) | Separately disclose aggregate current tax & deferred tax relating to items that are credited to equity. | N/A – No particular items such as adjustment of retained earning and a compound financial instrument recognized to equitySCE. P36 | Yes | N/A – No particular items such as adjustment of retained earning and a compound financial instrument recognized to equity N8. P46 | Yes |
112:81ab | The amount of income tax relating to each component of other comprehensive income. | N/A – No taxable component of other comprehensive income SCI. P33 | Yes | N/A – No component of other comprehensive incomeSCI. P30 | Yes |
112:81(c) | an explanation in either or both of the following forms:(i) the numerical reconciliation between tax expense and accounting profit multiplied by applicable tax rate.(ii) the numerical reconciliation between effective tax rate and accounting profit multiplied by applicable tax rate. | (i) Numerical reconciliation of income tax expense disclosed and ADQ provided a effective income tax rate N8. P66 | Yes | (i) Numerical reconciliation of income tax expense disclosed and EAL did not provided a effective income tax rateN8. P46 | Yes |
112:81(d) | An explanation of changes in the applicable tax rate to the previous...

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