The paper 'Minerals Resource Rent Tax - Accounting Issue " is a perfect example of a fiance and accounting assignment. There are various accounting matters that have been raised in the Australian Mining Tax. From the first discussion of the so-called "super-profits" tax in the year 2010, the Minerals Resource Rent Tax abbreviated as the MRRT has made headlines. The first accounting issue has been raised in this mining tax is whether the MRRT should classify as an income tax or not. From the articles, it is very apparent that the accounting effects of MRRT solely will depend on its definition in regards to the income tax.
In most cases, MRRT is evaluated by extraction of numerous taxable resources such as coal and the iron ore according to McKnight, D. and Hobbs, M., (2013). Incase MRRT is to be treated like royalty, and then MRRT liability will only be recognized as relevant only when the MRRT payable arises. However, in case it meets the requirements or definition of an income tax as posited in the AASB 112 Income Taxes in the Australian constitution, there will be a need for a deferred accounting from the date the legislation will be substantially enacted.
From the articles it is clear that the mining profits gained for MRRT are almost the same to the PRRT (Petroleum Resource Rent TAX) when considering the net amount, the mining revenue subtracted from the mining expenditure. The second accounting issue raised in the Australian Mining Tax was whether there was an income tax benefit despite paying new taxes. The miners raised this issue. From the calculation of the MRRT payable one of the allowances provided for is the starting base allowance which minimizes the mining profits. It was agreed that in case the miner chooses to employ the “ market value” as the starting base, he or she was eligible to receive future deductions (Kraal and Nash, 2010).
The problem with this was that the tax deductions were likely to be significantly higher when compared to the historical costs which were incurred on the mining projects. Thirdly, the issue of whether to keep a set of tax books was raised in the mining tax.
Many miners are aware that deferred tax accounting usually involved the consideration of the two primary sets of accounting books which are the corporate and accounting income tax books. From the mining tax, it is necessary for the miners who are subject to the MRRT to prepare the separate set of these accounting books for every Mining Project Investment so as to compare well with the MPI tax base for proper calculations (Ergas et al. , 2010). Who are the stakeholders? Describe each stakeholder and their concerns. From the articles, the stakeholders in the Australian Mining tax are the miners, the standard setters and finally the auditors.
The first stakeholder, the miners have been affected primarily by the Mining Tax thus raising concerns regarding some issues. The Australian miners have raised their concern about the possibility of job losses in the Mining Industry due to the Upper-Profit Tax policy introduced (Bell and Hindmoor, 2014). According to the miners, there are threats of mining project closures thus compromising with Australia’ s competitiveness in the mining industry.
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