Analyzing Income Tax Disclosures Telstra Corporation Limited is an Australian telecommunications…
Analyzing Income Tax Disclosures
Telstra Corporation Limited is an Australian telecommunications and media company that builds and provides land-based and mobile telecom services along with internet and pay television products. The company is Australia's largest 3G and 4G enabled mobile network. The footnote below reports income statement and balance sheet data for the company's income taxes.
a. What income tax expense does Telstra report in its 2012 income statement? How much of this expense was paid during the year or is currently payable?
b. Determine the company's effective tax rate.
c. What is the company's marginal (statutory) tax rate?
d. Telstra reports $1, 241 million of deferred tax liabilities in 2012 relating to “Property, plant and equipment.” Explain how such liabilities arise.
e. Describe how a $292 million deferred tax asset can arise from “Provision for employee entitlements.”