Apollo Company Corporate Accounting

The change in the issued capital over the past year is brought about by the increase in the number of issued Shares (fully paid), which increased from 13,320,000 shares as at 30th June 2016 to 179,944,265,000 shares as at 30th June 2017. According to Rodrik (2006) reserves are parts of firms’ profits which are usually set aside with a sole purpose of strengthening the financial position of the firm, also referred to as retained earnings. In most cases reserves are used to repay debts, dividends, bonuses and to purchase fixed assets. According to the Apollo tourism and leisure company there is a change in Reserves which decreased from $631,000 as at 30th June 2016 to $(13,101,000) as at 30th June 2017. This is because Apollo Tourism & Leisure Ltd Group acquired its affiliated entities that is Apollo Motorhome Holidays LLC and Apollo Finance Pty Ltd on 30th September 2016.

The firms tax expense figure $(641,000) in 2017 is not the same as the company tax rate of 30% times the firms accounting income which is $177,001,000 which gives $53,100,000 and 2016; this is because when the company tax rate is multiplied with the firms accounting income, tax effect amounts which are not deductible or taxable while calculating taxable income are put into consideration and they are as follows; Non-assessable income on associates, Variance due to differing corporate tax rates in offshore entities, Research and development expenditure, Research and development claim, Tax uplift on formation of tax consolidated groups, Prior year tax adjustments, Non-assessable interest income and Non-deductible acquisition costs thus when all these tax effect amounts which are not taxable are deducted from the tax corporate times the firms accounting income you get the firms income tax expense.

According to Schrand,(2003) deferred tax asset is an accounting term which implies the situation where a company has taxes paid in advance or overpaid on its balance sheet and all these taxes are usually carried forward to the company in form of tax relief and finally the over-payment is usually an asset to the company. There are various reasons as to why the deferred tax assets have been recorded in the balance sheet of Apollo tourism and leisure ltd company and they are as follows; First it is due to the taxes which have been paid or rather carried forward but have not yet been recognized in the income statement, secondly it is because of the carry-over of losses whereby the company has incurred high losses in the financial year 2017 of $7,615,000 which was $56,000 in 2016 and thus the company has been entitled to make use of the losses so as to minimise the taxable oncome in the following years and this has made the loss to be an asset to the company.

Finally the other reason as to why the deferred tax assets have been recorded in the balance sheet is because there exists difference between tax rules and accounting rules and this can be explained as follows; the Differed tax assets arose when the expenses were realised in the balance sheet of the company before they were obtained by the tax authorities. In the Apollo tourism and leisure ltd company, the deferred tax assets comprises of temporal differences which are mainly attributed to the amounts recognized in profit or loss and they are discussed as follows; First the tax losses are $56,000 in 2016 and they increase to $7,615,000 in 2017, moreover the unearned income is $479,000in 2016 and it rises to $2257,000 in 2017, while the provisions are $395,000 in 2016 and they rise to $557,000 in 2017, Furthermore the capital raising costs is nil in 2016 and it rises to $925,000 in 2017 in addition the unearned profits on leaseback are $1530,000 in 2016 and they decrease to $1374,000 in 2017.