Instructions for the report This task requires you to prepare a report to evaluate and comment on recognition and measurement regarding deferred tax assets and deferred tax liabilities. You need to...

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Instructions for the report This task requires you to prepare a report to evaluate and comment on recognition and measurement regarding deferred tax assets and deferred tax liabilities. You need to choose a company listed on the Australian Stock Exchange (ASX) and provide your evaluation regarding relevant presentation of deferred tax assets and liabilities. Your comments or evaluation can refer to paragraphs of relevant Australian Accounting Standards (AASBs). Paragraph 20 of AASB 112 has states: ” In some jurisdictions, the revaluation or other restatement of an asset to fair value affects taxable profit (tax loss) for the current period. As a result, the tax base of the asset is adjusted and no temporary difference arises. In other jurisdictions, the revaluation or restatement of an asset does not affect taxable profit in the period of the revaluation or restatement and, consequently, the tax base of the asset is not adjusted. Nevertheless, the future recovery of the carrying amount will result in a taxable flow of economic benefits to the entity and the amount that will be deductible for tax purposes will differ from the amount of those economic benefits. The difference between the carrying amount of a revalued asset and its tax base is a temporary difference and gives rise to a deferred tax liability or asset.” Discussions and Questions: You should answer questions listed in parts A and B in the report. Part A (10 marks) 1) “Revaluation of non-current asset doesn’t impact the recognition of future tax associated with that asset”. Evaluate this statement. (4 marks) 2) Discuss whether revaluation of non-current asset will lead to a deferred tax asset or a tax liability. (2 marks) 3) In your opinion, comment whether the deferred tax asset and deferred tax liability meet the definition and recognition for an asset and a liability according to the Conceptual Framework for Financial Reporting. (4 marks) 3 Part B (7 marks) 4) Provide and comment on an example (other than revaluation of non-current assets) that leads to a deferred tax asset in the chosen company. Evaluate its impact on financial position from the perspective of investors. (3 marks) 5) Provide and comment on an example (other than revaluation of non-current assets) that leads to a deferred tax liability in the chosen company. Evaluate its impact on financial position from the perspective of investors. (3 marks) 6) In your opinion, are there any deferred tax asset or deferred tax liability that are not recognised in the annual report of the chosen company? (2 marks) 2 marks will be awarded to effective communication and presentation of this report. Information regarding the report: • The report should include an executive summary, a body of contents covering points listed above, and a reference list. • You can refer to the paragraphs of AASBs to support your discussion presented in the report • AASB Conceptual Framework for financial reporting • AASB 112 Taxation • Each student should choose a company, which is listed on the Australian Stock Exchange (ASX). Find an annual report for the 2018/2019 financial year. Remember to use a complete annual report, not a concise financial report or a half-year financial report. • You must reserve your company by adding a post on ‘Discussion Board’ under ‘Reserve a company here’. Write the name and code of the chosen company in the subject of your post so everyone can see it, such as Medibank Private – MPL. • To ensure your choice of a company does not duplicate one already chosen by another student, they will be allocated on ‘a first come, first served’ basis. 4 • The reference list should include all materials supporting the report, such as an annual report and relevant AASBs. Please note: the textbook, study guide and Wikipedia cannot be used as references. • Sections extracted from the annual report or AASBs to support your report should be included in the Appendix. Also, provide specific references of the annual report and AASBs as in-text reference in your report, such as page 10 of annual report or AASB 101.26. If you choose to ignore this instruction, you will lose marks. • The references of this report should follow Harvard Referencing Style. Assessment criteria: The quality of the report will be assessed based on the following four areas: 1) Demonstrate and identify the accounting concepts applied. 2) Refer to paragraphs from related Australian Accounting Standard as guidelines to support your discussion. 3) Provide an example from the annual report to illustrate the implementation of an accounting concept(s) or principle(s) discussed. 4) Demonstrate effective communication, referencing, logical presentation and integrated evaluation. Special instructions for submission: • This is an individual assignment. • Word limit of this report should not be less than or exceed 10% of word limit (1800 - 2200 words) excluding executive summary, references and appendix. A loss of 10% of the total marks will apply if you do not follow this instruction. • You must use the electronic Assignment Cover Sheet provided, fill in details and then make this sheet the first page of your assignment. Do not send it as a separate document. • The file name of the report should include (in order) your surname, last name and your student number. For example: ‘ParkerSmith1235456'. 5 • Your assignments must be submitted as a word document. If you wish to submit in any other format please discuss this with your lecturer before the submission date. Please note: you are not allowed to submit the report in PDF file. • Unless otherwise indicated, all assignments are to be submitted online via the link for Turnitin assignment submission provided on the Blackboard site.
Answered Same DayMay 27, 2021ACC00713Southern Cross University

Answer To: Instructions for the report This task requires you to prepare a report to evaluate and comment on...

Rithik answered on May 28 2021
139 Votes
MANAGERIAL ACCOUNTING
ACC00713 REPORT 2020 S1
Executive Summary
The current report deals with the discussions on the deferred tax liabilities and deferred tax assets. The report aims to analyse and evaluate the identification of the deferred tax liabilities and deferred tax assets as well as measure them. All these discussions and analyses have been done in this report in the specific context of the listed company in the Australian Stock Exchange (ASX), McDonald’s, which is an American fast foo
d company. In this process of evaluation, continuously, the analysis has been kept in line with the Australian Accounting Standards (AASBs), which have mentioned the information with respect to deferred tax assets and deferred tax liabilities.
Table of Contents
Executive Summary    2
Introduction    4
Part A    4
1)    4
2)    5
3)    5
Part B    6
4)    6
5)    7
6)    7
Conclusion    8
Appendix: McDonald’s Annual Report 2018-19    9
References    12
Introduction
In this report, there would be a glance on the topics of managerial accounting, wherein it comprises of several terminologies, which are very significant in the recording of day-to-day transaction. It is important for the company or their uses. There is also a very important concept of Accounting Standards Boards means, all the implementation would be based on the legitimate rules and regulations. Hence, for that, it was needed to choose a company from the Australian market indices, for which McDonalds, the American fast food chain of outlets, has been chosen. After choosing the company there would be need find the proper information regarding that particular company, in this report there is also a need to talk about the company investors and their shareholder pattern and according to the relevant accounting standards.
Part A
1)
Revaluation of non-current asset is the instance, when the value of the non-current asset is revised due to acquisition of the company, or we can say that the revaluation of the non-current assets takes place when the company is going to merge or acquire by some pioneer company. At that time it recorded at cost and under the revalued amount, the noncurrent assets are being treated at fair value by implementing subsequent amount of depreciation and losses (Guia & Dantas, 2020). The reason of that why there is a need to revaluation is so much significant to calculate the value. The non-current assets of McDonalds are those, in which their value or their demand in the market is change according to the needs, only that factor is helping to create or establish their market value whether in future their market value going to rise or decline.
According to jurisdictions, after acquisition or any sort of merger the value of noncurrent asset were not fixed. It states that, when starting or establishing a new venture that time the values of non-current assets were increase in nature. It is also the reason that by the time the value of non-current asset also fluctuates, because its uses at the several ways that leads to diminishing the value of the same. In addition, it is the reason why there would be need of servicing the non-current assets (Widiatmoko & Mayangsari, 2016).
As compared to used one, because on that scenario of McDonalds, depreciation appeared so that is why it is difficult to predict the market value of non-current assets. That is the reason that it did not affect the recognition of future tax associated with that asset, because in order to find the future tax we first need to identify the precise value of the particular value. As far as non-current asset is concerned so it is difficult to set the tax slab of that particular assets as its value it is not fixed, so that is the reason, in which it is difficult to predict the tax range, which occur to not impacting the future tax associated with the asset.
2)
Revaluation of noncurrent assets will lead to deferred tax liability instead of deferred tax assets, because revaluation of a current asset states that the value of the non-current assets are not going to be the same. Hence, due to impairment losses and less accumulated depreciation appeared, so that why it is difficult to predict the future tax rates on the particular assets. Deferred tax assets mean payment of tax in the advance or overpayment of tax related to particular assets that is why it is not applicable on revaluation of non-current assets. It states that whenever the company going to execute the worthy transaction (Ladas, Negkakis & Samara, 2017).
Based on that, the transactions of Mc Donald’s are able to come in a position to pay their leftovers debt. On the other side, deferred tax liability means the company will ready to pay the taxes based on the transactions, which they make over a current period. Hence, that is why it is more impactful, because it only came into action when the transaction value is going to be precise there would not be any tentatively as far as market value is concerned. So deferred tax liability is sounder as compared...
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