Taming of the Shrew analysis

Document Type:Thesis

Subject Area:Accounting

Document 1

It’s registered under financial Market conduct act of 2013 and companies’ act of 1993 and its shares are publicly traded in Australia Stock Exchange. The three annual reports for the Vista Group Limited dates as following 31st December 2017, 31st December 2016 and 31st December 2015. The cash flow section of Vista Group Limited has three sections which include: operating activities, investing activities and financing activities. Operating items-these are items that show the amount of money that Vista group limited earns from the ongoing day-day business activities. This may include the sale of goods and services or manufacturing activities. in year 2016 the interest received was 317NZ$ as compared to 259NZ$n 2017. The overall decrease was a result of a decrease in interest paid due to an agreement signed with ASB Bank limited to reduce the interest rate paid.

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Investment items-this include cash flow items that show a company aggregate change in cash arising from losses and gains from investment activities. The following items are recorded by vista group as investments • Property, plant, and equipment-these are the fixed assets of the company which attribute to probable future benefit. In the year 2016 they amounted to 3353NZ$000 as compared to 1629NZ$000 in 2017. This relates to the purchase of vista group shares. There was no payment of contingent consideration in 2016. • Proceeds. -this is the amount of money earned from sale. it can either be positive or negative. It was during the financial year 2017 that the divided were paid to both the proprietors of the patent and the non-controlling interest which led to 6450NZ$increase during the year.

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• Short term deposits-these are the deposits of one year or less than a year maturity which are placed in the financial institutions and earns a fixed rate of interest. • Cash-this is the amount of money that a company holds for use of day to day operation or financing current operations. • Foreign exchange difference-this is the differences that arise from transferring one currency unit to another currency due to the difference in exchange rates. In year 2016 exchange difference amounted to 1399NZ$ as compared to 2017 which was 1049NZ$, the difference was a result of increased exchange rate during the year. Other comprehensive income statement record items that have no effect on the income statement but its effect is recorded in the statement of financial position.

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Those items are recorded in this portion because their underlying transaction is not yet completed hence income is not yet realized. In the year 2017, exchange difference on translation of foreign operation was classified as other comprehensive income. This was because of the difference that arises during conversion of functional currency to presentation currency. Vista group items which are incorporated in the financial statements are quantified using the currency of entity’s jurisdiction which is its primary economic environment. 2 million Dollars earned from Vista America but the income has not been included in taxation due to the complexity of accounting policies with that of IFRS. Vista group limited reported both differed tax asset and differed tax liability in its financial position. The differed asset was 2342NZD and the differed liability amounted to 1643NZD, this show that there was a higher amount of differed asset than the differed liability.

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The reason why both of have been recorded separately is because of the timing difference when each of them is going to be realized. Also Generally Accepted Accounting Principle requires recognition of differed tax liability for the differences in timing but for the deferred tax assets, valuation may be adjusted in accordance to favorable expectations for recognizing the benefit and can only be recognized. Cash flow records how cash has moved during that year and hence taxes amounting to 6784NZD was paid and 46NZD was pending to be paid in the coming year. It’s surprising how I understood the tax treatment in Vista Group Limited from the tax treatment of other companies. Although the company prepares the three financial statements none of the tax reported in each statement corresponds to what is usually reported in cash flow, surprisingly enough the company has followed all the guidelines in the preparation of the financial statements as stipulated by the GAAP and IFRS in New Zealand.

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