Letter of Advice for increased emission of traffic and construction Assignment Sample

Letter of Advice for increased emission of traffic and construction

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From: XYZ Ltd.

To: Patrick Pty Ltd.

Dear Mr.,

Kindly find the below attached points for addressing key and relevant issues regarding this letter of advice.

Extent of Research Demonstrated

Identification of Key Law Cases

The most important environmental challenges are associated with an increased emission of traffic and construction. An original accounting pronouncement are designed by the effective tools which is maintains by countries some rules and regulations. The appropriate accounting system provides conceptual structure within the business organization which is crucial for economic growth. According to the Companies Act 2013, accounting standard issued by the ICA (Institution of Chartered Accounts) which is established by the parliament act. The impact of taxation is including in the business and Australian government includes new principle which is effectively examine all the different types of financial entities (Vystavna et al. 2018). During the same time, ATO (Australian Tax Office) identify all the monthly payments to an Australian bank account which is controlled by the Australian authority.

Reasons of Decisions

In order to, dealing with the complex business environment Australian government introduced some principles which is puts positive impact on business structure. An understanding of how taxation law works and each unit are dealing with the complex situation by the basic concept of income tax law. There has been made several changes in the business structure in Australia which is improves financial environment of the business (Canevaro, 2018). In order to, considered each transaction of the business, most of the business are including partnership concept to get more return from the business. Behind the specific decision there are some important reasons such as introduced country with the new taxation principles to survive in a complex situation, increment of professional accountants as well as increasing management skills within the Australian taxation system. The impact of taxation is in the business structure which is positively reflect on economic performance of the country.

Depth of Analysis and Evaluation

Critical Analysis

The critical analysis of the computation of financials for the company concerned Patrick Ltd. can be explored by considering the overall performance in the years 2019, 2020 and 2021 respectively. As per the performance of 2019, it is ascertained the overall land valuation of $ 100 million is considered to be the opening stock as the land is considered to be a trading asset for Mr. Patrick. The sales proceeds are considered to be $ 45 million, wherein a 30% share of land is being sold.

The additional aspects of the financial computation for 2019 consists of determining the purchase value as $ 50 million as it is assumed that the company bought an additional $ 50 million land during 2019. The resulting gross profit is considered to be -$ 30.00, while the resulting net profit is considered to be -$ 31.10. Lichuma (2021), critically expressed that negative profitability prospects can be associated with minimal profit-seeking approaches, lower sales revenues generated and a high operational and trading costs incurred.

The analysis for the year 2021 also consists of negative gross profit and net profit returns, which are identified numerically as $ -15.10 and $ -24.10 respectively. Hence, the critical analysis suggests that the company has not utilised and optimised its operational and trading resources in a harmonious manner, leading to negative profitability prospects. The financial performance for 2021 has been analysed accordingly, which leads to contrasting readings as compared to 2020 and 2019 respectively. As per financial analysis of 2021, it can be ascertained that the figures of gross profit and net profit have been calculated as $ 25 and $ 24 respectively [Refer to Appendix 1]. Hence, it can be explored that the overall financial dynamics have observed a favourable change leading to positive figures. However, as per critical illustrations of Claussen (2018), absence of purchase values could lead to misleading profitability figures, which in turn could generate improper financial readings for a company.

Implications explored

In addition to the detailed illustration provided for ascertaining the financial health of Patricks Ltd. the exploration of various implications is further deemed to be vital determinants to ascertain the overall aspects of monetary prowess. The primary implication explored by conducting the financial analysis of the company can be attributed to high cost of sales and low sales values. Bar-Siman-Tov (2021), illustrated and opined that this is a critical and unfavourable situation for a company as it could potentially lead to high financial losses in the near and distant future of an organisation. The additional implications explored with respect to ascertaining the adverse financial health of Patricks Ltd. can be associated with determining a high cost of operations as opposed to sales values generated. This can further hamper the tax provisions and the shareholder orientation associated with smooth and streamlined conduct of business activities by Patricks Ltd.

The additional implications explored in the financial analysis of Patricks Ltd. can be ascertained with respect to the nullified valuation of land purchases made in the financial year 2021. Htun and Jensenius (2020), critically expressed nullified asset purchases during a financial year is considered to be an ailing proposition for an organisation. Hence, it could be interlinked that negative profitability prospects in 2019 and 2020 have created financial incapabilities for the company, due to which the company could not afford purchasing additional land as trading and valuation stocks.

Use of Client Centric Approach

Legislation Used to determine taxable residency

According to the Income Tax Assessment Act 1997, there are some important rules which have to follow by the individual resident of the country. Residential categories are classified into two categories which is resident and non-resident and taxable law is applicable for all the resident of the country. The taxable income includes all types of compensation which is comes under profit (Eskander and Fankhauser, 2020). The taxable incentives are considered by the two major categories which is legislation division 355 which is Income Tax Assessment Act 1997 and Industry Research and Development Act 1986. The applicable tax is come under tax rate 30% when the local income tax which is 5% respectively. A ‘numerical reconciliation’ between the average tax rate and applicable tax rate which is deducting from the annual income of the individual resident.

Explanation of Profitability Changes using market value method

Market value method based on the sales value or taxable income towards recognition of main product which depends on the product costing. In order to, analyse the total profitability as well as market demand of the country. In order to individual organisations are trying to identify the market value method and the profitability also depending on a particular factor (Lee, 2018). The profitability of the business depends on market value when market value can be decreased profitability also reduces at the same time. The market value method is depending on the reversal cost method individual company or business are focusing towards the recognition.

The market value method is further considered to be an affluent financial method to determine the actual financial movement occurring for a particular fixed asset. In order to, compute profitability prospects as per market value method, sales value and overall purchases made during a financial year are considered. Hence, by applying the market value method for 2019, 2020 and 2021, the overall profitability figures attribute to numerical figures of -$5, 0 and $ 55 respectively [Refer to Appendix 2].

Quality of Legal Writing

Issues

Less profitability

Low profitability includes risk aspects which is migrate the profitability and that directly affect countries' economies. The profit margin rate decreased due to less earning as well as limited capital as well as exceeding the number of workers in the business (Lichuma, 2021). Less profitability includes and financial performance of the company has decreased. The lower percentage of earnings is the major reason and that can directly affect the profit margin rate.

Rule

Legislation rule and role

The legislation involves effective concept and sometimes which is referred the statutory law which is represented by an action. All level of legislation laws is effectively controlled by the government of the country to improve economic and social condition of the country.

Application

The application of relevant laws and legislative principles is further deemed to be an essential component for a client to have a clear understanding as to how business dynamics affect legal actions for a given situation. The application of laws can be associated by ascertaining the consequences flowing from a particular position of assessing the financial performance for Patricks Ltd. Thus, it can be determined that the consequence of a negative and slow profitability could potentially attract hefty penalties from legislation when accurate trading stock valuation is not being carried out as per guidelines prescribed by the ATO.

Conclusion of Advice / Summary

According to this letter of advice proposed to Patricks Ltd, it is thereby concluded that the company lacks prowess in generating ample profit-seeking opportunities from trading of land as a stock. Moreover, it can be ascertained that the company can attract heavy penalties from the tax authorities when taxes and taxable dues are either not being cleared off or are being manipulated by showing less profitability of the company. Hence, the summary for the client could therefore lead to risky future investment propositions owing to dilapidated financial aesthetics of Patricks Ltd.

Yours Sincerely

XYZ Ltd.

Reference list

• Bar-Siman-Tov, I., 2021. An introduction to the comparative and multidisciplinary study of omnibus legislation. In Comparative Multidisciplinary Perspectives on Omnibus Legislation (pp. 1-31). Springer, Cham.
• Canevaro, M., 2018. Laws against laws: the Athenian ideology of legislation. In Use and Abuse of Law in the Athenian Courts (pp. 271-292). Brill.
• Claussen, V., 2018. Fighting hate speech and fake news. The Network Enforcement Act (NetzDG) in Germany in the context of European legislation. Media Laws, 3(3), pp.110-136.
• Eskander, S.M. and Fankhauser, S., 2020. Reduction in greenhouse gas emissions from national climate legislation. Nature Climate Change, 10(8), pp.750-756.
• Htun, M. and Jensenius, F.R., 2020. Fighting violence against women: Laws, norms & challenges ahead. Daedalus, 149(1), pp.144-159.
• Lee, J.M., 2018. Mandatory helmet legislation as a policy tool for reducing motorcycle fatalities: Pinpointing the efficacy of universal helmet laws. Accident Analysis & Prevention, 111, pp.173-183.
• Lichuma, C.O., 2021. (Laws) Made in the ‘First World’: A TWAIL Critique of the Use of Domestic Legislation to Extraterritorially Regulate Global Value Chains. ZaöRV: Zeitschrift für Ausländisches Öffentliches Recht und Völkerrecht, 81(2), pp.497-532.
• Vystavna, Y., Cherkashyna, M. and van der Valk, M.R., 2018. Water laws of Georgia, Moldova and Ukraine: current problems and integration with EU legislation. Water international, 43(3), pp.424-435.

Appendices:

Appendix 1: Financials

Appendix 2: Market Value Method

(Source: Created by the researcher)