GD Express Carrier Berhad Case Report
1. INTRODUCTION
This report is a critical analysis on tax disclosure of two selected companies—GD Express Carrier Berhad (GDEX) and Bonia Corporation Berhad (BONIA) which falls under trading/services sector and consumer sector respectively. Analysis is based on the annual report 2015 of each company (extracted in the appendices). All detailed calculations are performed in the footnotes attached.
GDEX, founded in 1997, focuses on two business segments, namely, Express delivery and Logistics. Primarily, it operates in Malaysia and Singapore, engages in providing domestic and international express delivery service, facilities and assets management services and insurance services (Reuter, 2016). BONIA, a Malaysia-based international luxury fashion …show more content…
Following the tax effect adjustments consist of six components, wherein non-allowable expenses holds the greatest percentage, which is 66.5%6. Together with “deferred tax assets not recognized”, they lead to 29.2% increase in tax charge7. Conversely, the remaining items, including “non-taxable income”, “lower tax rates in foreign jurisdiction”, “tax incentive and allowances” and “utilization of previously unrecognized tax losses”, reduce the tax expense by RM2,304,000, which is 12.7%8. Additionally, the underprovision of current tax and deferred tax amounting to RM738,000 is added on before arriving at the total tax …show more content…
The possible reason is that BONIA has numerous subsidiaries operating over the world while GDEX predominantly operates only in Malaysia and Singapore. Besides, GDEX’s tax over-provided in prior years was a result of the actual tax paid being lower than the tax expense reported in last period’s income statement, meanwhile, BONIA’s underprovision indicates that its last period’s tax paid was higher than what was reported. These differences are adjusted in 2015’s tax charge, which results in a tax reduction for GDEX and an extra charge for BONIA. In terms of deferred tax movement, there is an increase in liability for GDEX as it increases its tax expense. Conversely, BONIA’s deferred tax lowers its tax expense, implying that there is a decrease in
This report is a critical analysis on tax disclosure of two selected companies—GD Express Carrier Berhad (GDEX) and Bonia Corporation Berhad (BONIA) which falls under trading/services sector and consumer sector respectively. Analysis is based on the annual report 2015 of each company (extracted in the appendices). All detailed calculations are performed in the footnotes attached.
GDEX, founded in 1997, focuses on two business segments, namely, Express delivery and Logistics. Primarily, it operates in Malaysia and Singapore, engages in providing domestic and international express delivery service, facilities and assets management services and insurance services (Reuter, 2016). BONIA, a Malaysia-based international luxury fashion …show more content…
Following the tax effect adjustments consist of six components, wherein non-allowable expenses holds the greatest percentage, which is 66.5%6. Together with “deferred tax assets not recognized”, they lead to 29.2% increase in tax charge7. Conversely, the remaining items, including “non-taxable income”, “lower tax rates in foreign jurisdiction”, “tax incentive and allowances” and “utilization of previously unrecognized tax losses”, reduce the tax expense by RM2,304,000, which is 12.7%8. Additionally, the underprovision of current tax and deferred tax amounting to RM738,000 is added on before arriving at the total tax …show more content…
The possible reason is that BONIA has numerous subsidiaries operating over the world while GDEX predominantly operates only in Malaysia and Singapore. Besides, GDEX’s tax over-provided in prior years was a result of the actual tax paid being lower than the tax expense reported in last period’s income statement, meanwhile, BONIA’s underprovision indicates that its last period’s tax paid was higher than what was reported. These differences are adjusted in 2015’s tax charge, which results in a tax reduction for GDEX and an extra charge for BONIA. In terms of deferred tax movement, there is an increase in liability for GDEX as it increases its tax expense. Conversely, BONIA’s deferred tax lowers its tax expense, implying that there is a decrease in