Collect the latest annual report of an ASX listed company (Blackmores Australia) for the last 2 financial years. Please read the financial statements (balance sheet, income statement, cash flow...

Contents
Abstract    2
Introduction    2
Accounting Profit    2
Taxable Income    2
Temporary Difference    2
Taxable temporary difference    2
Deductible temporary difference    3
Deferred Tax Asset and Deferred Tax Liability and their Recognition    3
Deferred Tax Liability    3
Deferred Tax Asset    3
Reporting of Deferred Tax Assets and Liabilities as per IFRS    4
Case Study of Blackmores Corporation    4
Tax liability of Blackmores    4
Effective and Statutory Rate    4
Reasons for the differences    5
Complex treatments and Insights from Study of their taxation reporting    6
References    6
Abstract
The paper attempts to define and explain briefly the concepts of accounting and taxable profits, temporary differences leading to creating of deferred tax assets and laibilities, their recognition and reporting as per Australian Law and IFRS accounting standards through the case of Blackmore and its disclosure of income tax reporting. It attempts to look into the tax iformation provided by Blackmore on corporate income tax liabilities, adjustments made to arrive at effective tax rate and payable expense to build an understanding of the fundamentals of income tax recognition, calculation and reporting
Introduction
Concepts of accounting profit, taxable profit, temporary difference, taxable temporary difference, deductible temporary difference, deferred tax assets and deferred tax liabilities
Accounting Profit
It is the company’s profit/ income reported in its books of accounts calculated according to generally accepted princliples of accounting. It is the net of revenues and total expenses which the firm has incurred while doing business such as operating expenses, interest, depreciation and taxes.
Taxable Income
Taxable profits on the other hand, are arrived at by calaculating the portion of the profits of the company that are subject to income taxes as per the tax laws of the country/countries the company is operating in.
The difference between the two exist because of difference in recognition and treatment of explicit costs by laws for regulatory reporting for producing financial statements, such as companies act, and income tax law of the country for the purpose of calculating the income tax liability.
Temporary Difference
Differences between the carrying amount of an asset or liability in the balance sheet or statement of financial position and its tax base. Temporary differences may either taxable temporary difference or deductible temporary difference.
Taxable temporary difference
Taxable temporary differences are differences in timing of recognition of expense or receipts from when they are received to when they are accrued and their treatment as per taxation rules and accounting rules that cause taxable income in the current period to become lower than pretax accounting income for tax purposes.
This means that income tax payable in that period shall be lower than the accrued income tax expense. The difference between the income tax payable and the accrued income tax results in creation of deferred tax liability to the tune of difference in the two values. Deferred tax liabilty is utilized in the future periods when income tax payable will be higher than that recognised in the books of accounts
Deductible temporary difference
Deductible temporary differences are differences which cause the taxable income and therefore the actual tax payable in current period to be higher than the income tax accrued, calculated as per accounting profit.
This creates a deferred tax asset to be utilized in future periods to plug the difference between the future period income tax payable which would be than the that in the books of accounts
Example of Deductible temporary difference and taxable temporary difference
If a company’s profits subject to tax include depreciation expense of $3M of a 1 year old asset while the income tax law allows a deduction of depreciation of...