OneAll International Limited Case Study

Document Type:Creative Writing

Subject Area:Accounting

Document 1

The firm has an excellent expansion and marketing strategy which demonstrates the outstanding uptake and appeal from clients with regard to the outdoor furniture products of the company. OneAll International Limited has invested heavily and strategically over the years in order to build a “strong, profitable outdoor furniture business servicing over 42 markets around the world. ”1 The quest to expand and market its products is strengthened by the company listing on ASX, an ideal platform for the firm to deliver on its development and growth strategy. From a financial perspective, the company is well-positioned, generating free flow of cash as well as high earnings margins without debt. Due to this, the firm has the capacity to fund growth opportunities. This paper will analyze the items of the firm’s financial statements, including balance sheets, income statements, statements of changes of owner’s equity, and cash flow statements. The aim is to offer insightful description of the equity items of the firm, explanation of the changes, and description of the income tax expense. The report will explain whether income tax expense differs from corporate tax times the accounting income, clearly giving reasons for this. Towards, we will respond to the questions as outlined below. From your firm’s financial statement, list each item of equity and write your understanding of each item. Discuss any changes in each item of equity for your firm over the past year articulating the reasons for the change. Net Profit: The Company recorded a net profit of 3. million dollars for the six months ending 31 December 2016.

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From the previous financial records, the company recorded 9 million dollars in Net profits. The records in profits are attributed to the business model of the firm; since the company deals directly with retailers enabling achievement of high profit margins by cutting intermediary costs and maintains relationship with retailers in order to maintain product availability in stores. This model has optimized its profits by making sure products are available to the end user at very competitive rates compared to its competitors. Due to this, the company is well-positioned to expand its market share across the globe. Assets: Current assets are recorded by 31 December 2016 stood at 26. million, which is an increase from the previous financial year. The non-current assets were valued at 5. million, which include tax liabilities and trade liabilities. This record is an increase from the previous valuation which was at 8.

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million. The increase in liabilities is attributed to increase in trading costs and tax levies, including employee compensations. The company operates in different countries, which have diverse tax rates that have influenced the value of liabilities incurred by the company. For the recent fiscal reports, the expense on taxes is at $ 2,704,412. This is the value of payable tax calculated from the taxable income of the entire period based on the rates of taxation for each country or jurisdiction the firm operates in. the adjustments on the tax expense results from deferred tax assets and liabilities which are accredited to short-term alterations. Is this figure the same as the company tax rate times your firm’s accounting income? Explain why this is, or is not, the case for your firm. Yes. Liabilities and deferred tax assets that result from effective legislations influence the adjustments in order to counterbalance both current levy assets and tax overdue assets.

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The offsetting of the deferred tax assets is enforced when there is a right to pay the recent tax assets alongside the present excise duties and the overdue levy assets alongside the delayed levy charges. Moreover, it is effective when they both relate to the same jurisdiction either on the same taxable entity or different taxable entities with the intention of offsetting the expenses simultaneously. Therefore, the income tax payable is not the same as the income tax expense because of the changes related to deferred tax assets and liabilities that are attributed to the temporary differences. Is the income tax expense shown in the income statement same as the income tax paid shown in the cash flow statement? If not why is the difference? The amount of income tax payable is based on the reported profits of a company and differs from the actual tax liabilities.

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However, after a close analysis and assessment of the report, and referring to other financial accounting, I have gained new insights on the reasons why the differences exist. While a firm calculates its tax expense based on its income for a particular period, the income tax paid is influenced by changes resulting compensations and operation costs. The recognition of revenue is affected when it is confirmed that the economic benefit will flow to the group and the revenue measurement can be done reliably. On the other hand, the revenue from sale of goods is recognized at the point of sale while other revenues are recognized once they are received or whenever the right to receive or claim the payment is established. The total tax expense may differ from the payable tax liabilities because of influence from deferred tax assets and liabilities as well as other non-deductibles or waivers enacted by the authorities.

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This affirms that consumers continue to value the products design, quality, and branding. Screen Shots References Independent Investiment Research. Oneall International Limited (ASX: 1AL). One All International Limited. OneAll delivers first half FY16 NPAT of $4.

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