Theories of Consumer Decision Making

Theories of Consumer Decision Making The concept of consumer buying behaviour is not new, it has been discovered ages ago .The current marketing strategies focuses on consumers buying behaviour. The marketing aim is to grow and make best use of their market share. Consumers decision making process is highly sensitive and is based on their learning and experience. The paper explains about the consumers psychological factor particularly learning and its effect on buying pattern. Learning has been explained with the help of theories, using black box and stimuli response theory. The black box explains the consumers decision making process and factors that affect buying decision. In addition this model also highlights the market stimuli, market environment, buyers stimuli and the buyers response. These internal and external factors aim to influence the purchasing pattern of every single consumer. Buyers are highly sensitive while making decisions and marketing stimuli provide necessary information and knowledge about the product or service. Consumers are also influenced by social and psychological elements like society, family, personal, motivation and learning. In practical consumer use personal thinking or experience to response repetitive buying. The self learning helps to reduce the buying options and narrow down the substitutes available in the market. Today modern companies have adopted the customized marketing techniques to understand the thinking and decision making standards. The cognitive learning helps the buyer to remember the previous purchase each time when similar arise buyer will use own experience to make decision. Satisfied consumer will not go for information search which comes after problem recognition and others steps in decision making. Marketers can influence post purchase decision by positive learning. Provided examples indicate the importance of buying behaviour and fortune 500 companies have used these elements to increase their retention rate. E.g; Dettol marketing explains the buyers response and trust which they have developed by using psychological marketing and positive cognitive learning. To enhance the learning process Marketer used education and awareness program to develop the learning of every single consumer. E.g. Toyota Lexus on other hand also focus experience as their marketing strategy. By understanding the need and market trust they introduced Lexus (Premium product) which leads the market from decades. Marketing techniques plus additional value added service enable them to enhance the customer experience. Toyota consumers were happy and satisfied with original band. By constructive experience Toyota succeeded to develop new market for luxury automobiles. While exploring consumer learning it was observed that customer retention has a direct relation with positive learning. It is also suggested that marketers must use buyer behaviour and need as the primary research of market study. Financial products and services require more understanding of consumers. It also needs to develop conceptual framework together with service marketing to deal with individual consumer. As explained its become more challenging for the marketers to understand, satisfy and influence the consumer to use financial services. By focusing customer experience, strong perception, service quality and trust marketers can influence the decision making and supplier choice. Parasuramans, A., Zeithaml, V.A. and Berry, L.L. (1985) says that its very difficult for a consumer to choose financial products and supplier because of the intangibility of product, and supplier reputation. Together with Ansoffs model and focus existing product and existing market marketers can increase buyer behaviour through target marketing. Outcome suggests that companies must emphasize on the elements that impinge on the buyers behaviour together with decision making. Learning can be deployed to evaluate individual response which has been proved by examples in the literature. Significantly, the end result suggests that learning can be use as communication and interaction tactic to view individual response especially financial products. Table of contents 1.0 Introduction Business success can be obtained through the appropriate study of consumer behavior. Consumer buying behavior is a multi step process, which involves buying, paying, using and reconsidering the same product over again. To understand the buying pattern or actions is very imperative as it directly influence the business success. As mentioned by Caslione, John A, (2009) the marketing strategies must meet consumer preferences in recession time in order to gain competitive edge. Most commonly buying activities reflects the strategy use by the companies for marketing and fulfilling the market needs. So consumers are considers to be the entry and exit to a successful business. To understand the consumers decision making it is important to understand the cognitive factors affecting their needs, choice, preference and final and post purchase experience or learning (5 Ws of marketing). Research done on buyer behavior helps to understand the deciding process in two ways i.e. collectively and individually. Both individual and collective buying process is affected by other factors like demographics, environment and perception. (Foxall, Gordon R, 1987) mentioned through the behavioral research companies can forecast the buying frequency and product preferences. Theory of Consumer behaviour and decision making The decision making theory was examined and modified by Nicholas Bernoulli and Oskar Morgenstern but it originate about 300 years ago. The theory was based on the expectation of decision outcomes which was a cognitive process. Later the theory was modified with the addition of value and satisfaction. In addition Allen Shocker explains the complexity and steps which involve in decision making. (Michael Richarme, 2005) Degree of involvement is another important factor while looking and making decision. Researchers also proved that the marketing activities have huge impact on consumers psychology which helps to take decision. Consumer behaviour is a psychological function which involves the customer to undergo the identification of their needs, searching methods to fulfill the needs and make purchase decisions accordingly. The process can also be described as collecting, interpreting, making plans and executing it for successfully buying the desired product (Lars Perner, 2008). The behavioral approach of the consumer is highly dominated by their psychology. The first model of consumer decision of making process was developed in 1963 by Howard and later edited in 1969 which has become the current theory of consumer behavior. The updated model provides an integration among the several psychological, social, and market pressure on the buyers choice and information (Howard and Sheth, 1969). Source: http://eprints.bournemouth.ac.uk/10107/1/Consumer_Behaviour_Theory_ _Approaches_%26_Models.pdf) 1.2 Consumer Decision Making Process Consumers cannot make their decision alone, rather they need to interact and look up for the information from various sources like their own concept, reference groups, environment, other buyers and sellers etc. (Source: http://eprints.bournemouth.ac.uk/10107/1/Consumer_Behaviour_Theory_ _Approaches_%26_Models.pdf) The consumer decision making process is interaction between the stimulus for the purchase, the characteristics or need of the consumer and their corresponding response. The stimuli can either be intra or inter personal from the consumer. This can further be explained by the BLACK BOX MODEL which emphasizes on the connection between the response and the stimulus of the buyer. (Cindy Dietrich, 2010) The companies plan and process their marketing stimuli, whereas on the other hand social factors like political, economic and cultural, impact the environmental stimuli. Fig# 5 the Black Box Model (Source:http://marketing5.net/Buying-behaviour-and-decision-making-criteria-of-Base-of-the download-w11405.pdf) The box encloses the characteristics of buyer and their decision making process which helps the buyer to decide and response. Internal and external factors have been represented in the model as buyer characteristics and environmental stimuli respectively. These factors together influence the decision process and buyer response as described in the figure above. From the identification of problem till the post evaluation of the decision each step is very critical for the buyer which directly affects the marketing strategies. Positive learning reduce the steps in decision making where consumer narrow down the choice, information search, alternative, here consumer behaviour to buy the specific product. All these process relate to buyer psychological factors, motivation, learning, personality etc. on the basis of information gathered the buyer tries to select the best available option while making the purchase. (A) How the selected factor affects the behaviour theoretically? Origination and influence of learning on buyers behaviour The cognitive method is the greater part of mental psychology which founded by early Marketers back (360 B.C). The memory or learning theory was developed by Aristotle who linked learning and knowledge as a mental process. In 1950 Hubb developed a model called Stimlus- organism- response which was dominated by behaviorism approach. (Hope J. Hartman,2001) Consumer decisions are influenced by individual uniqueness like age, life style, self concept, personality, occupation and economic condition. The purchase decision also influenced by individual learning and past experience. (Kotler, 2006) Learning refers to actions performed or information received. It arises from experience and interplay of wants, stimuli, response and reinforcement. Once the consumer has learned from their experience they try to discriminate and recognize the difference between similar buying stimuli and adjust their response to it consequently. Learning theories are also important to marketers in order to create the demand for a product using the buyers knowledge, motivating reasons for purchase and also backing them up with positive reinforcement (Frans Giele, 2009). Learning evolves over a period of time and helps the consumer to improve their knowledge. There is a continuous impact on the behavior of the consumer and their purchasing activities in future. The information gathered using different learning processes help the consumers to create a guide and mental framework for their purchasing pattern, behavior and decision. Learning is also closely to perception as it serves to be the raw input for the consumer knowledge which they have gained from previous buying occasions. (Mario Glowik, Slawomir Smyczek, 2011). Perception can better be explained as a process which the consumer uses to select, organize, receive and interpret their buying need and enrich their learning for a better purchase decision. (William j. Mcguire, 1976) said that perception is more important and has high influence than other stimulus. In this way the consumer evaluates the various brands and products which come to their mind. Often the compared aspect of the product relates largely to the psychological and functional benefits offered by the products or brands. (Thomas M. Aslin, Michael L. Rothschild, 1987) Marketers must understand the importance of learning/ experience as first impression is the last impression and it is important for the company to retain the existing customer as it is always cheaper and consecutively make new loyal customers. Other market factor like service quality and sellers eminence are also a part of human cognitive process which directly affects the buying pattern. (Kau, Daleen and Serene, 1995) New marketing strategies should focus to enrich customers experience by enhancing their learning/ experience and benchmarking those processes to increase market segment and share. Mental learning determines that for how long does particular information retains in human mind. This process involves different activities that a consumer relates while buying the particular product or service and then this information becomes the knowledge for future reference. Consumer retrieves the information from the memory if the same or similar product or service is observed. Effective marketing strategies and tools help to create a lasting impact on the cognitive learning of the consumers. (Mark D. Uncles, Grahame R. Dowling, Kathy Hammond and Angelo Manaresi, 1998) Marketers can use behavioral learning to enhance the consumers experience associated to their products as a large market segment loves to follow the current market trend and feel satisfied with their decision. Example 1: Dettol antiseptic has excellent advertisement which has made a lasting impact on consumers mind by using their marketing slogan of Be 100% sure. This advertisement has created a long and positive image on consumers mind since ages. Even after the launch of other brands of antiseptic liquids like Savlon by JJ, consumers still look for Dettol as their first choice while making a purchase decision as Dettol has made a strong brand image. Example 2: Allen bought Mercedes Benz S-class and told his boss and the boss admired the comfort, safety and power while driving, he will be happy to hear positive response and feel satisfied with the buying decision and feel proud to associate with the brand. Service products require more concentrated and customized service and experience. As they affect each customer in different manner and individually. Consumers level of involvement influences their buying behavior decisions which can be classified into three categories: Repetitive/routine buying, limited and extensive decision. Level of satisfactions/learning is also important to decide the nature of buying behaviour in future. Consumers keep their learning experiences as a catalogue and categories them as positive or negative which they use for future reference. Example 3: A Toyota customer will remain loyal to the brand if he has a good experience with his previous purchase of its models and associated services. So when the company introduces new car segment like Lexus which belongs to niche market, the customer will not hesitate to buy the product since his experience is affirmative. 2.0 B: Why is customer experience important to marketers in explaining buyer behaviour? Consumer behaviour and decision making process has been one of the favorite research topic for marketers since ages. Authors like Sheth (1974) recommended that consumer decision making is largely influenced by their family, awareness, knowledge and power of their attitude for the brands available in the market. Consumers use detailed information and their past experience to minimize brand ambiguity. Therefore managers must ensure that each purchase experience leads them to higher satisfaction and positive learning about their product and brand. Allen m. Weiss, Nicholas h. Lurie, and Deborah j. Macinnis, (2008) mentioned in their paper that Marketers can play with the psychology of the consumer as consumers compare each product in their mind. Companies need to identify about the consumers, what they want and which products make them happy. Fortune 500 companies have chosen marketing activities like advertisement, pricing, packaging and labeling to attract their customers. Modern marketing practices have moved on to CRM, service quality which leads to strong brand image and name. Service quality has emerged as an influencing characteristic in consumers learning, as a goods service quality leads to positive learning and rewarding experience for the consumer. Example 4: Dell is famous for their products and after sales services. In case of any technical assistance needed, the company sends their team to solve the problem at the customers residence. So the customer is highly motivated to trust and buy their product. Dell used customer experience and feedback to improve their product and service quality. 2.1 Explanatory examples (Marketing and Managerial Implications) 2.1.1 Dettol (Reckitt Benckiser) Strong marketing and brand image is behind the success of Dettol. Marketers have carried extensive research, advertisement and learning campaigns. The company has focused to educate and make every single consumer aware about personal hygiene and germ free environment. The marketing slogan of Be 100% sure has created a positive image and brand in consumers mind. The cognitive learning has helped the company to influence the buying behaviour and decision making of the consumers. Dettol has used several marketing strategies which were designed to influence the learning of consumers to ensure that whenever they think of antiseptic liquid they must think of the only brand i.e. Dettol. Through the use of learning and awareness programs, the company has successfully expanded their business and product categories from personal care to total care. E.g.: They first launched their antiseptic liquid followed by toilet soap, hand wash, shower gels and bars, shaving creams etc. Dettol has used mar keting knowledge and communication to develop the need of the product which was supported by various marketing and advertisement programs. Sayantani Kar, (2009) mentioned that Consumers are highly influenced with learning approach adopted by Reckitt Benckiser hence they are loyal to the brand. Dettol marketers have chosen psychographic and behavioral segment to target the selected consumer and then penetrate by the use of marketing channels. Competitive marketing and advertisement is the powerful USP (unique selling proposition) which helped them to grow and develop strong image which directly influenced the buyer behaviour. By using cognitive and behavioral learning factor company is rapidly engaged in research and development to extend its product line. (Prerna Raturi, 2006) Several business rivals like PG, Unilever have tried to focus on consumer learning and succeeded to break the market to some extent but being a pioneer and strong brand, Dettol remains as their first preference. 2.1.2 Lexus (Toyota Motor Corporation) Being an automobile market leader the company has transformed itself into quality conscious company. Toyota is well known for its durability, performance, luxury and features. Consumers have learned the superior quality and performance by experiencing Toyota cars. Company has a wide segment market which starts from middle income to high income groups. Toyota has transformed high end market with clever marketing and using consumer experience. (Bill Vlasic, 2012) Through encouraging experience they have entered in to niche market where traditional rivals like, BMW, Benz and Volvo dominate the market. By understanding the need of their existing customers they took innovative steps and broke the market share and successfully launched LEXUS. Lexus is a premium car and also one of the largest selling brands in the world. Carl Howe (2007) mentioned that Lexus used direct and target marketing by which they targeted loyal customers who were happy with Toyota models, while they carried massive marketing plans to focus and educate the consumers that Lexus belongs to Toyota but it is a more value added product. They used words like same family but different child concept to introduce Lexus. The new concept was high value leading to high price which influenced buyers to experience the new product. Consumers have responded greatly to the new model which resulted in greater sale for the company, since the cognitive learning was affirmative which insisted them to try the new model Lexus hence upgraded their behavioral learning. Alan Ohnsman and Makiko Kitamura (2011) stated that the after sales service was one of the key marketing features together with the product that enabled the marketers to develop lasting impact on consumer psychology and they succeeded to influence buyers behaviour. (C) Best product category and its implications. 3.0 Financial Services (Banks) Financial services are the most discussed topic in todays economy. By narrowing to financial products like, Personal banking and Investment banking particularly, service marketing has introduced many models to understand and deal with the problems. Consumer behaviour is one of the biggest issues which differentiate these two markets (product, service). Services are different from goods because of their heterogeneity, inseparability, intangibility, perishability and customization which make it difficult for marketers to identify and practice the service standards. Major Banks and financial institutions have realized the importance of consumer psychology toward financial products which influence the final decision. (McKechnie, Sally, 1992) To make a purchase decision for a financial product the consumers are not completely aware of the utility and consequences, the learning is developed simultaneously with the product use and Therefore its highly critical for the marketers to acquaint with personality, consumer thinking, relationship, service quality etc. which directly affect the buyer preference. The financial services are not a one- time purchase but there are several two- way transactions for long time. These services need the trust, confidence and mutual rapport of the consumer in the financial institutions. Lunt, Peter, (2005) explains that Marketers invests plenty of time to facilitates and establish a mutual relationship to print positive image in the consumers cognitive learning which they consider to assess the creditability of the institution repeatedly. It also benefits the institution in long term business with individual consumer. Trials are not available for these products and services, most of consumers use their experience to make decision every time. So customer experience, trust and brand image are the main wisdom drivers which influences the buyer to select from available financial facilitators. 4.0 Conclusion The object to study the consumer behaviour and decision making is to examine the role of determinates that influence the final decision of consumer. The justifications and explanation was based on available consumer decision making theories, buying behaviour model and deep study of selected determinant learning. While exploring the determinants it was observed that marketing stimuli, an external and internal factor plays a critical role in consumer psychology which influence individual response. These elements affect the final purchase of every single product or service. Therefore its highly critical for the marketers to identify and effort to narrow down the difference between consumer and supplier interest. Study also indicates the major difference between product and service and also suggests addressing them with more focused marketing. As a service based product buyers are more conscious about the cost and outcome of the specific product because of intangibility of the product it is difficult to communicate with the consumer. Learning encourages the buyer to understand and provide a clear feedback of any particular product. If the consumer is happy with the product or service the feedback will be highly positive which also influence the buyer to straight rebuy without considering other options. In financial products consumers are always scare with the outcome of the decision and highly depend on their previous learning. Marketers have used this element to understand the needs and want to optimize the satisfaction level, which is actually developing positive attitude to rebuy the same product. Marketers can use modern methods to reduce the level of negative out come by spending more on developing consumer learning and experience. The right use of service quality, customer relation and satisfaction helps to create long term business with every customer which also reduces the brand switching. It is also observed that companies and marketers cannot solely depend on learning determinant. While investigating the determinants it is seen that marketing stimuli also affect the buyer behaviour. The choice of marketing mix product, place, price, promotion) significantly changes the taste and choice of buyer. Marketers must design the strategies to reduce the flaws and ensure that the right message is conveyed to the consumers. The primary aim of marketing is to develop the need, attract, educate and influence consumers to buy the product. Therefore proper market study, product design, segmentation and targeting should be ensured by the marketer. 5.0 Learning from the assignment Consumers involve in buying and decision making process every day. The learning and decision making affects every time one use the product or service. Being continuous process its crucial for the buyer and the marketer to understand the process behind the decision process and what factors affect the buyer on each purchase. Being a marketing student the assignment helps to understand the available theories in details. Exploratory assignment determinants of buying behaviour helps to comprehend the practical implication of each determinant like Marketing stimuli, external and internal factors. By using exploratory research on chosen factor it was observed that it is very critical for the company and the marketer to understand the consumer need, preference, satisfaction and loyalty. Companies cannot rely on each determinant which influences buyer decision because consumer keeps changing their buying decisions. Strong marketing is also one of the key successes for every company which involves more focused, targeted and innovative communicative tools to address the need of the consumer with offered solution. Assignment also facilitates to analyze the practical illustration from the world renowned companies. While exploring their marketing strategies particularly which helps to learn from their practices. Critical analysis help to understand the pros and cons of every option which the marketers use address the problem. The assignment also encourages self learning, theories and their implications. Being a future manager it is quite helpful to discuss and address the problem in details. The positive outcome is to address the problems with solutions which help to groom the thinking and brainstorming process being a decision maker and manager. Strong marketing is the key of todays competitive business, it was an opportunity to learn and evaluate the possible solutions while understanding consumer decision making process which will help to take positive decisions in future time. 6.0 Appendix Fig#1 Theory of customer buying behavior (Source : http://eprints.bournemouth.ac.uk/10107/1/Consumer_Behaviour_Theory_ _Approaches_%26_Models.pdf) Fig #2 Decision making through information search (Source: http://www.consumerpsychologist.com/cb_Decision_Making.html)

Jose Rizal Essay

Rizal’s visit to the United States (1888) Rizal’s Visit to the United States (1888) Rizal first saw America on April 28, 1888. His arrival in this great country was marred by racial prejudice. He saw the discriminatory treatment of the Chinese and the Negros by the white Americans. Arrival in san francisco Saturday,April 28, 1888- The steamer Belgic docked at San Francisco. American health authorities did not let the passengers to land for one week because of the rumored cholera epidemic. Rizal knew there was no cholera epidemic that time and he protest with other passengers the unjustifiable actions of American authorities He soon discovered that it was motivated by politics and the ship was carrying 643 Chinese coolies. Rizal in san francisco May 4, 1888 – The day he was permitted to go ashore and registered at the Palace Hotel which was then considered a first- class hotel in the city May 4 to 6, 1888 – Rizal stayed in San Francisco. Across the American continent May 6, 1888 – it was Sunday, 4:30 P.M., Rizal left San Francisco for Oakland, nine miles across San Francisco Bay, by ferry boat May 7, 1888 – it was morning, Rizal awoke and had a good breakfast at Reno, Nevada, now glamorized by American high-pressure propaganda as â€Å"The Biggest Little City in the World†. Rizal in New york May 13, 1888 – it was Sunday morning when Rizal reached New York. He stayed three days in this city, which he called the â€Å"big town†. From May 7 to May 13, Rizal wrote in his diary the beautiful memories from Nevada, Chicago until he reached Albany. May 16, 1888 – Rizal left New York for Liverpool on board the City of Rome. Rizal saw the Statue of Liberty on Bedloe Island. Rizal’s impression of america The good impressions were: 1.)The material progress of the country as shown in the great cities, huge farms, flourishing industries, and busy factories. 2.) The drive and the energy of the American people;  3.) The natural beauty of the land 4.)The high standard of living; 5.)The opportunities for better life offered to poor immigrants. The bad impression Rizal had of America was the lack of racial equality. 1890 – two years after Rizal’s visit to the United States, Jose Alejandro, who was then studying engineering in Belgium, roomed with him. Rizal’s impression of America â€Å"is the land par excellence of freedom but only for the whites†.

Administrative Management Essay - 1299 Words

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Eugenics Solving Social Problems Essay - 1203 Words

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Secondly, it willRead MoreThe Role Of Primary Sources Of The Critical Thinking Skills During The Industrial Revolution1052 Words   |  5 Pages Second, the Nazi Party had propaganda or proposition concerning the promise to offer work to unemployed male family members. These values were essential in convincing women to vote for the party in the 1930s. It is essential to note that the eugenics played critical roles in relation to the policies of the Nazi Germany. The central government policy with reference to the Hitler administration was the breeding of a ‘superior race’, which required the very most prevention of the ‘inferior races’Read MoreScience As A Tool Towards Progress1903 Words   |  8 Pagesthey know everything there is to know about the field due to their brief study of the article. But science as a subject of study is not the cause for any of this, it is the human beings that attempt to use science as a tool for their own personal, social, economic, or political furtherment, that should be called upon to dissect this. Science can, and should, be used as a tool towards progress because it is up to those who use science to direct it in the direction of progress. As it stands, scienceRead MoreIntelligence And Concepts Of Modern Day Society1721 Words   |  7 Pagesman, in particular, phycolo gist Robert Sternberg believed in the list is accurate but believed in boiling it down to 3 central intelligence, analytical intelligence, creative intelligence and practical intelligence. These three categories Intel problem solving, decision making and abstract thought. Even with sub-categories that research had provided, research has suggested that there is still an underlining factor that connects all of these traits, the research is open-ended and still foreign. IntelligenceRead MoreThe Government As An Intermediate Agency2120 Words   |  9 Pagesthe moral person always governs himself, what, for him, is the moral relevance of having a government (besides solving co-ordination problems or altering the factual setting)? The era of wars and terrorism was followed by segregation, racial sub-ordination, and complacence. One report written by senior civil servants in 1934 for the Department of Health actually suggested that the eugenics policies of the Nazi Germany should be adopted in the UK. In 1927 Westminster passed the Mental Deficiency ActRead More Genetic Determinism2854 Words   |  12 Pagesobservable, measurable, or even definable trait. It is a social construction. The concept of inherent, immutable intelligence emerged at the turn of the century as Social Darwinism. The phrase survival of the fittest is often credited to Darwin, but it was actually coined by Herbert Spencer, who began the Social Darwinist movement. His belief that society evolves from lower to higher forms is similar to Darwins theory of natural selection. Social Darwinists believed that helping the lower classesRead MoreProcreation2665 Words   |  11 Pagesof the issue. Scope of this problem almost unlimited and correlates not only with modern legal and ethical general acceptable principals, but also with core issues of human existence. Second, I do believe, that understanding of origin of procreation and ability to build personal approach in this issue plays significant role for every professional in the Health Care System. Even if in real life situation some of us will never directly participate in solving such problem, still establishing firm personal

Technology Has Exceeded Our Humanity - 1511 Words

Technological Terror Famous mathematician, Albert Einstein once said, â€Å"It has become appallingly obvious that our technology has exceeded our humanity.† What Einstein is trying to say is that what had once made us human has vanquished into thin air with the growth of technology in our society today. The Earth is constantly in motion and so is the human race. From the beginning of our history and even our prehistory, the human race has evolved and changed the world they had been given. All they had was the greatest weapon they could find; their minds. Each individual brain cell worked hard to make a civilization that could expand and improve for generations to come. Sadly, as civilization flourished, more and more technology was developed and integrated into our daily lives.Technology is not a bad thing, but it has taken away our humanity. Our humanity is our instinct to survive and use our mind. Nowadays, people struggle to divulge into the real essence of humanity; education, the arts and c ulture, and living a healthier lifestyle. They fall prey to obesity, lack of interest in arts like theater, distraction from work, loss of religion, etc. Without technology in this world, I can broaden my spectrum of knowledge, dive into the culture and arts the world can offer, and lead a happy and healthy lifestyle. In the technological world of today, people begin to drift away from learning in school due to technology. Technology is defined as using scientific knowledge towardShow MoreRelatedTechnology Has Exceeded Our Humanity1807 Words   |  8 Pagesrather the very ideas and innovations that are often conjured up by engineers. â€Å"It has become appallingly obvious that our technology has exceeded our humanity.† – Albert Einstein. Technological advancements in the medical, industrial, and agricultural industries have expanded the carrying capacity of the earth several times over as well as lengthened the average lifespan for human beings. However, as technology advances to improve life, it also begins to create opportunities for misapplicationsRead More Effects of Technology on People Essay1182 Words   |  5 PagesDoes technology affect people or do people affect technology? Technology affects every aspect of our lives, we all use it every day with little thought. People take it for granted, sometimes knowing little about what brought that technology into existence. At the same time older generations have a hard time adopting the new technologies and continue to favor technology they are accustomed. The idea of technology is as old as the human race. To understand technology; first we need a common definitionRead MoreThe Is A New Day796 Words   |  4 Pagesdesire for automated existence, has sunk into the decadence of comfort. Alive with consumption, humanity inhabits a pushbutton technotopic paradise revolving around the InterFace. InterFace advocates implant technologies on an evolutionary, convenience, and necessity basis, where the enhancement of the human body advances communication, intensifies information absorption, and supersedes the body’s physical limitations for newfound human freedoms . The technology becomes a contemporary savior, overcomingRead MoreThe Idea of a Garden by Michael Pollan644 Words   |  3 PagesIt has become appallingly obvious that our technology has exceeded our humanity†, these are the quotes of the famous German physicist Albert Einstein in relation to how the world has become overly reliant on technology. As a result, we have taken nature for granted while also ignoring the adverse effects of technology. The making of steam engine, the usage of fossil fuel and the creation of chlorofluorocarbon are all technologies which has benefited us greatly and are continuing to do so, but likeRead MoreHuman Population And Its Impact On The Environment921 Words   |  4 Pa gespopulations of species are limited to a specific number, called its carrying capacity, which refers to the ability of an ecosystem to support their needs. Once a population grows to the point where it extends past the limit, the environment no longer has the capacity to support them and individuals must die to stabilize the population. Humans are no exception to this rule, as their populations are constrained by such density dependent factors as the availability of food, land, and other resources. GrowthRead MoreWall-E versus Feed on Society1223 Words   |  5 Pagesâ€Å"Technological progress has merely provided us with more efficient means for going backwards† (â€Å"Brainy Quotes† 1). While this epitomizes modern time, it also represents M.T. Anderson’s Feed and Pixar’s Wall-E. Feed is a book about a dystopian society influenced by a device, called â€Å"feed†, implanted in the brains of the citizens. The author describes a group of regular teenagers that venture to the moon for a spring break vacation of partying and going â€Å"in mal†. The main character, Titus, falls forRead MoreWall-E versus Feed Essay1212 Words   |  5 Pagesâ€Å"Technological progress has merely provided us with more efficient means for going backwards† (â€Å"Brainy Quotes† 1). While this epitomizes modern time, it also represents M.T. Anderson’s Feed and Pixar’s Wall-E. Feed is a book about a dystopian society influenced by a device, called â€Å"feed†, implanted in the brains of the citizens. The author describes a group of regular teenagers that venture to the moon for a spring break vacation of partying and going â€Å"in mal†. The main character, Titus, falls forRead MoreThe Flight From Conversation By Sherry Turkle1103 Words   |  5 PagesAlbert Einstein once said, †It has become appallingly obvious that our technology has exceeded our humanity†(Einstein). Everyday, techno logy is advancing at a rapid pace, improving many lives and making things more convenient. For instance, in Japan, robots have been created by researchers at the University of Tokyo to assist home chores. Although technology has made our lives better, we have lost an important part of our self: the skills necessary for human communication. In her essay, â€Å"The FlightRead MoreEssay on Impact of Technology on Society941 Words   |  4 PagesTechnology is continuously developing and has begun creating shortcuts for the American society. As a society we need to find a balance between our technological use and our everyday life. In my opinion, society has become too dependent on technology. The more advanced technology becomes, the more it seems to be gaining control over our lives. Even though technology is offering society many beneficial qualities; it also is causing many negative effects to occur. Technology is affecting society sociallyRead MoreThe Adverse Effects of Anti-Soci al Media Essay662 Words   |  3 Pagesillustrious Albert Einstein once voiced his opinion and stated that, It has become exceedingly obvious that our technology has exceeded our humanity. Einstein’s perspicacious accomplishments have made his name equivalent to â€Å"mastermind†. Although the technology was not nearly as advanced in the early and mid-20th century, when Einstein was quoted, his words of wisdom are nevertheless remarkably relevant to the modern-day era of technology, including text messaging and social media. Cell phone and internet

The Impact Of A Globalized Economy Economics Essay Free Essays

string(29) " markets that are coming up\." In the current twenty-four hours, we are populating in an economic system which is globalized and this is clearly apparent. The whole universe is undergoing transmutation at a really high velocity as clip goes by. Krueger ( 1994 ) observes that, Local, national and regional economic systems one time comparatively insulated from each other are engaged in a apparently grim procedure of planetary integrating characterized by spread outing trade and competition, private sector-driven investing, market friendly authorities financial and pecuniary policies, the spread outing embracing of scientific discipline and modern engineering, and the planetary spread of a common, cross-cultural mass consumer products-driven civilization ( p13 ) . We will write a custom essay sample on The Impact Of A Globalized Economy Economics Essay or any similar topic only for you Order Now While it is established that the procedure of globalisation commenced 100s of old ages ago, on the other manus, the velocity at which this procedure has been traveling has merely increased in the last century ( 20th century ) and in this new century, the velocity is seen to be increasing even more. The international corporations are playing a major function in rushing up the rate at which globalisation is taking topographic point. Merely until in the recent times, people lived in a universe that was extremely divided in which there was capitalist economy and communism and the universe was besides being greatly militarized, with each state traveling its ain manner. However, in the present twenty-four hours, things are different and have greatly changed. In the current universe, each and every state is endeavoring to deduce some political and economic benefits coming from the economic growing which is broad and market driven. This paper is traveling to see the extent to which globalisation of the economic system has taken topographic point. It is traveling to be established that, globalisation of the economic system is presently at a higher degree as compared to the globalisation of the economic system in the last century. It is besides traveling to be indicated that, the planetary economic system is traveling to be at a even a higher degree in the approaching 20 old ages and besides beyond this clip. The Extend to which the economic system is globalized Harmonizing to the Association of Chartered Certified Accountants ( 2010 ) , in the current twenty-four hours, the planetary economic system is at a tipping degree. This association points out that â€Å" the old readings of success, growing and planetary stature has been based on motion in Fortune, CAC, FTSE, DAx and Hang Seng indices, tracking multinationals based in a few dominant states † ( Page 6 ) . An reading like this one is undergoing alteration at a extremist gait to do acknowledgment of the strengths that are based in the parts which are holding the market strengths that are non similar but are instead diverse. These diverse strengths are traveling to give a definition to the planetary economic system in clip to come. The Association of Chartered Certified Accountants ( 2010 ) observes that globalisation will still travel on in the hereafter and this will convey about a universe of â€Å" flatter † . Harmonizing to their apprehension, globalisation which is invariably undergoing development will derive form ensuing from these strengths in the diverse markets that is being perceived in the assorted parts of the universe. At the corporate degree, it is expected that there will come up a universe of what is referred to as â€Å" tradesmans † and fresh concern federations and this will come along with those coactions that are greater among the markets, community and besides among concerns. The support for this cooperation will arise from the support that is traveling to be offered by increasing ordinances in harmonisation. Following this, the planetary concern ‘ hereafter is seen to be more complex and non really much clear cut. At the present, the planetary argument is being dominated by a larger group formed by the states in the universe. The Association of Chartered Certified Accountants ( 2010 ) , points out that, â€Å" originally steered by the G5 – France, Germany, Japan, the U.S and the U.K- the planetary economic system was progressively influenced by Canada, Belgium, Italy, the Netherlands, Sweden, and Switzerland, taking to G11 † ( page 6 ) . However, doing acknowledgment of the developing state ‘s impact has resulted in the leaders all over the universe to hold credence of the G20 states as the fresh planetary foundation. Following this credence, the universe leaders have embraced an of all time broader group in argument sing the planetary economic system while there is distributing of economic influence to several parts. In the hereafter, there will be much powerful competition for the natural resources. This will name for the demand to hold an international attack that will hold to be coordinated at a higher degree in order to recognize entree to adequate resources every bit good as procuring these resources. Among resources are oil, being the most of import one, nutrient, H2O and minerals. It is besides projected that, there will be growing of the planetary market in ways that are varied and this growing will be dependent upon the handiness of resources, the parts and on the partnerships that will be formed. There will be convergence of the ordinances regulating fundss across the markets all over the universe and at the same clip there will be traveling on of the universe regulative cooperation. From this, there will be facilitation in conveying about an addition in the handiness of the beginnings of fundss and besides an addition in capital flow volumes every bit good as the values of this capital. The function that will be played by each authorities in the hereafter is given definition to by stressing private concern facilitation. Careful administration is rather important while globalisation of the economic system goes on. In the hereafter, new systems will be set up in order to guarantee seting the universe of tradesmans in a better place ( Association of Chartered Certified Accountants, 2010 ) . Basically, there is altering of the universe phase and this is ensuing from globalisation and growth of the markets that are coming up. You read "The Impact Of A Globalized Economy Economics Essay" in category "Essay examples" It is projected that by the twelvemonth 2030, this tendency will hold brought about a flattering of the economic scene ( Association of Chartered Certified Accountants, 2010 ) . In the hereafter, a smaller figure of the restrictions on globalisation will convey approximately much more competition. However, this competition that is projected to come up will non be looked at as being a conflict. The states in the universe are seen to be sharing among themselves wealth and helping one another in the class of the competition. Therefore, in the hereafter, competition will non be looked at as being a game in which there will emerge also-rans and victors but instead as a instance in which all the participants in the game are playing in one squad with those economic systems that are developed and those that are coming up sitting on the same tabular array to portion thoughts every bit good as capital and the best ways of transporting out concern. The Association of Chartered Certified Accountants ( 2010 ) , quotes the manager of PriceWaterCoopers, Malaysia in which he says that there will be equilibrating once more of the planetary economic system while it tries to set to the crisis ( fiscal ) by turning out to be to a great extent reliant to the United States of America. The manager hopes that the economic systems that are emerging will come up with the market bunchs that are new and this will hold to hike an economic chance that is two manner between the United States of America and other states with which they trade. Therefore, there will be publicity of the trade in which there is a two manner flow of goods and services alternatively of holding a universe in which the goods are transported to the United States of America and at the same clip capital is taken to the East. Establishing on this is information, it is expected that globalisation will no longer be driven by the transnational corporations that have roots in the economic systems that are developed but instead it will every bit good be driven by the international concern organisations that are based in those markets that are coming up or emerging ( Jagdish, 2004 ) . The indexs or instead, the marks of the lifting adulthood are clearly being seen in the current yearss at an increasing degree. In the class of the last 10 old ages, the entire figure of the transnational corporations based in emerging economic systems in the Fortune Global 500 has gone up by more than three times. For case, in the twelvemonth 2008, there were over 70 transnational companies from the emerging markets and the portion of these markets is increasing together with the significance they have in the universe equity markets. The Association of Chartered Certified Accountants ( 2010 ) points out that at the clip there had been recovery from fiscal crisis of the 1990s ( Asiatic crisis ) â€Å" private capital flows to low and middle-income economic systems more than quadrupled from $ 200 billion in the twelvemonth 2000 to over $ 900 billion in the twelvemonth 2007 † . The fiscal crisis that commenced from the twelvemonth 2007 has emphasized the procedure by indicating out the failings of the fiscal constructions of some developed economic systems and at the same clip indicating out the strengths of the fiscal constructions of the economic systems that are emerging. There will be a state of affairs where there will be a displacement in the economic power but this power will be stronger in the economic systems that are already developed in the current twenty-four hours and these already developed economic systems would travel on portraying their power of being advanced. The stableness in the economic system every bit good as the political stableness the developed economic systems have would convey back growing and this will keep these economic systems at the topmost degree of the value concatenation. These economic systems will travel on being the compositors of the thoughts. And on the other manus, the economic systems that are emerging will travel on following the Western consumerism theoretical account ( Todaro A ; Smith, 2003 ) . While the theoretical account of Western consumerism goes on ruling globally, those Western economic systems that are smaller would raise the degree of taking portion in the planetary economic system, doing the G grouping larger. These economic systems in the West that are smaller will follow the entrepreneurial spirit and an addition in the political power will help them to emerge above the laterality that is exercised on them by the bigger Western economic systems ( Todaro A ; Smith, 2003 ) . Harmonizing to Pythes Market Focus ( 2009 ) , the planetary crisis that came up in the recent times was grounds plenty that we are really populating in a globalized economic system. It was a prove that we are populating in an economic system that is interconnected to a degree that changes in the rates ( exchange and involvement ) , the monetary values of stocks every bit good as the monetary values of goods and services have influences in most of the universe. It has been realized that we are really populating in a planetary economic system Pythes Market Focus ( 2009 ) , make an accent that no individual or group of people that are in their right senses can non hold a belief in the benefits that are derived from planetary integrating. These benefits are such benefits as division of labour at an international degree, the moving of inventions at a quicker velocity from one part of the universe to the other, holding freedom of coming up with picks sing the transportation of capital, goo ds and services internationally every bit good as free motion of thoughts from one state to the other in the universe. Pythes Market Focus ( 2009 ) , pose a inquiry about those who support the Laissez-faire philosophy, which is – â€Å" free markets are self-sufficient and market surpluss will rectify themselves provided the authoritiess or regulators do non step in in the market topographic point † ( Page, 2 ) as whether or non they are supposed to be justified. They go farther to present another inquiry refering the issue of whether or non the Laissez-faire philosophy is taken as a failure or non in the bing planetary crisis. There is less or sometimes no support for province intercession on the issues refering the economic system by Laissez-faire doctrine. This doctrine gives support to peculiar types of autonomies that are negative in resistance to the autonomies that are positive like the redistribution of wealth by the state. This resistance by the Laissez-faire doctrine is on the footing of the belief that distribution of wealth facilitates taking off of wealth from those sectors that are much more productive and apportioning them to those sectors that non much productive and this brings about a decrease in productiveness and a diminution in the motive to work ( Peter, 2001 ) . Pythes Market Focus ( 2009 ) present an thought that Laissez-faire goes in front to give an statement that whatever impermanent equality of consequences that are achieved from redistribution would neglect with velocity with no coercion for the ground that persons do possess varied grades of motive every bit good as the native capablenesss and would come up with varied determinations on the footing of the values they have that are different among them. More so Individualistic nowadayss an statement that inequality that is stuff is an indispensable consequence that comes from the freedom to do picks about which actions to prosecute in without enforcing these actions to other people. This turns out to prefer those that are impersonal in respect to the varied competing involvements which groups that seek to hold power ( political ) every bit good as privileges in a state have for any likely intercession that is made by the authorities. The authorities intercessions that is sought from the authorities harmonizing to Pythes Market Focus ( 2009 include â€Å" ordinance, making legal monopolies, viing Torahs, or revenue enhancements, protectionism, maximization of economic public-service corporation † ( Page 2 ) . Pythes Market Focus ( 2009 ) , present a inquiry as to whether or non the planetary economic system is acquiring uncontrolled on an increasing degree due to the absence of the ordinances that are suited. They put it that the deficiency of the ability by the shapers of policies to transport out the enforcement of ordinances that are bing by conveying in those that are more rigorous and even more complex will convey approximately pandemonium and a regulative system that is multi-level and holding much more bureaucratism. This will be at the cost of capital motion and anything else that is positive that consequences from it. Each and every society requires holding some common values that ensures there is keeping together. This end can non be served by the market values entirely for the ground that market values merely makes a contemplation of what a individual participant is ready and willing to offer to another market participant in the class of an exchange. With no uncertainty, there is demand for the society to hold establishments to be put in topographic point to help in recognizing such societal ends as societal justness every bit good ; as political freedom ( Dani, 1996 ) . However, among some states, these societal establishments have been put in topographic point and the large inquiry is why such establishments have non been put in gait in the planetary society. It is true in stating that planetary society development has moved at a really slow gait in comparing to the planetary economic system growing. We are populating in a planetary society that has varied imposts every bit good as traditions and faiths, different categories of people dominated by racism in which even if there are claims of holding regard for human rights, this society still remains to miss flawlessness ( Stiglitz, 2003 ) . Causing what is referred to as â€Å" freer planetary market economic system † turning out to be less free through conveying in more limitations and complex processs is rather â€Å" toxicant † . It is a good determination to set much focal point on what brought about the bing economic crisis. And this cause was deficiency of the ability by the policy shapers to guarantee the enforcement of equal current jurisprudence and non disregarding the jurisprudence by coming up with more statute law that will, in an automatic mode, kill the motion of capital in a free mode. Decision Globalization began 100s of old ages ago but the velocity at which this procedure has been traveling has merely increased in the last century and even in this century this velocity is seen to be increasing even more. The international corporations are playing a major function in rushing up the rate at which globalisation is taking topographic point. The planetary crisis that came up in the recent times was clear grounds that we are really populating in a globalized economic system. It was a prove that we are populating in an economic system that is interconnected to a degree that changes in the rates ( exchange and involvement ) , the monetary values of stocks every bit good as the monetary values of goods and services have influences in most of the universe. It has been realized that we are populating in a planetary economic system in which people, goods and capital can travel freely. This besides applies to direct investings every bit good as the fiscal minutess. Globalization of the economic system will still travel on in the hereafter and this will convey about a universe of â€Å" flatter † . The globalisation that is invariably undergoing development will derive form ensuing from the strengths in the diverse markets that is being perceived in the assorted parts of the universe. At the corporate degree, it is expected that there will come up a universe of what is referred to as â€Å" tradesmans † and fresh concern federations and this will come along with those coactions that are greater among the markets, community and among concerns. The support for this cooperation will arise from the support that is traveling to be offered by lifting ordinances in harmonisation. Following this, the planetary concern ‘ hereafter is seen to be more complex.. It is expected that globalisation will no longer be driven by the transnational corporations that have roots in the economic systems that are developed but instead it will every bit good be driven by the international concern organisations that are based in those markets that are emerging. The indexs of the lifting adulthood are clearly being seen in the current yearss on an increasing degree. In the class of the last 10 old ages, the entire figure of the transnational corporations based in emerging economic systems in the Fortune Global 500 has gone up by more than three times. Taking an illustrations, in the twelvemonth 2008, there were over 70 transnational companies from the emerging markets and the portion of these markets is increasing together with the significance they have in the universe equity markets. It has besides been seen that there will be a state of affairs where there will be a displacement in the economic power but this power will be stronger in the economic systems that are already developed in the current twenty-four hours and these already developed economic systems would travel on portraying their power of being advanced. The stableness in the economic system every bit good as the political stableness the developed economic systems have would convey back growing and this will keep these economic systems at the topmost degree of the value concatenation. These economic systems will travel on being the compositors of the thoughts. And on the other manus, the economic systems that are emerging will travel on following the Western consumerism theoretical account. How to cite The Impact Of A Globalized Economy Economics Essay, Essay examples

Journal Of Accounting Finance And Economic - MyAssignmenthelp.com

Questions: 1. What is your firms tax expense in its latest financial statements? 2. Is this figure the same as the company tax rate times your firms accounting income? Explain why this is, or is not, the case for your firm. 3. Comment on deferred tax assets/liabilities that is reported in the balance sheet articulating the possible reasons why they have been recorded. 4. Is there any current tax assets or income tax payable recorded by your company? Why is the income tax payable not the same as income tax expense? 5. Is the income tax expense shown in the income statement same as the income tax paid shown in the cash flow statement? If not why is the difference? 6. What do you find interesting, confusing, surprising or difficult to understand about the treatment of tax in your firms financial statements? What new insights, if any, have you gained about how companies account for income tax as a result of examining your firms tax expense in its accounts? Answers: Answer 1: In the balance sheet statement of an organisation, three main items are present and one of them is equity. Elanor Retail Property Fund is not exempted from this item as well. Based on the balance sheet statement of 2017 of the organisation, the major items include issued capital, treasury shares, reserves and retained earnings. Issued capital is taken into account as the equity of the business firms (Armstrong et al. 2015). Issued capital is computed by multiplying the number of outstanding shares with the par value of the shares. The annual report of the organisation states that issued capital has increased from $42,280,000 in 2016 to $55,768,000 in 2017 (Elanorinvestors.com 2018). The next equity item of Elanor Retail Property Fund is reserves. As commented by Atanasov and Black (2016), reserve is a portion of the equity of an organisation, which is taken into account as the additional amount except for basic share capital. The latest annual report of Elanor depicts that its reserves have increased from $13,411,000 in 2016 to $13,487,000 in 2017 (Elanorinvestors.com 2018). The next item in the equity section of the organisation includes retained earnings. It denotes the overall profit and losses of the organisation from the time of its formation decreased by any dividend paid on the part of the shareholders (Graham et al. 2017). According to the annual report, it has been found that the organisation has not experienced any form of retained earnings; instead, it has suffered from accumulated losses. The accumulated losses of the organisation have increased from ($6,968,000) in 2016 to ($7,228,000) in 2017, which denotes that it has more losses in contrast to profits. The final item in the equity section of Elanor is treasury shares. Treasury shares might arise due to buyback of shares or they are not issued in the first place. These shares do not have dividend payments, voting rights and thus, they are excluded from the computations of outstanding shares (Cheng, Ioannou and Serafeim 2014). According to the balance sheet statement of Elanor in 2017, the treasury share value has remained constant at $691,000 in both 2016 and 2017 and hence, it denotes that the organisation has not repurchased shares from the shareholders. Answer 2: In the current era, business organisations often incur various types of expenses like administration expenses, selling expenses and others. Tax expense could be considered as one of them. Moreover, tax expense is taken into account in the form of major liability of the organisations owing to the state, federal and municipal governments of the nation (Christensen et al. 2015). Tax expense is computed by multiplying the suitable business tax with the income before tax after factoring few main items like tax assets, non-deductible items and tax liabilities. In case of Elanor, the tax expense of the organisation has fallen from $927,000 in 2016 to $768,000 in 2017. Despite the increase in profit before income tax, the tax expense of the organisation has been reduced due to reversal of tax provision. Answer 3: It has been identified that the corporate tax rate in Australia is 30% (Damodaran 2016). In case of Elanor Retail Property Fund, the identical rate is applied, which is identified from the annual report of the organisation. Moreover, the profit before income tax is identified as $12,394,000 in 2017 (2016: $5,070,000). In case of application of the above tax rate, the overall tax expense would be arrived at $3,718,200 in 2017. However, the company has taken into account other items in order to calculate the total tax expense. Such items include the following: Entertainment Non-deductible amortisation and depreciation Adjustments of fair value to trust investment property Non-deductible expenditures Proceeds of insurance on plant and equipment Reversal of tax provision By taking into account, the above-depicted items and the domestic tax rate, Elanor has reconciled the tax rate. This has resulted in variation of overall tax expense of the organisation compared to the corporate tax rate times the accounting income of the firm. Answer 4: Deferred tax assets and liabilities are two main concepts related to tax operation of the organisations. Deferred tax assets denote the position, in which the organisations make advance or over tax payments on their financial assets (Dowling 2014). On the contrary, deferred tax liabilities depict a position, in which the difference could be observed in the tax carrying value and profit of the organisation. For Elanor, it could be observed that the organisation has disclosed both deferred tax assets and deferred tax liabilities in its annual report. The deferred tax assets of Elanor have been $2,600,000 in 2017 (2016: $2,079,000), while the deferred tax liabilities of the organisation have been $1,635,000 in 2017 (2016: $1,607,000). By taking into account the accounting norms and regulations pertaining to deferred tax assets and liabilities, some reasons are inherent for reporting deferred tax assets and liabilities. For deferred tax assets, the reason might be the additional payment of depreciation on the part of the organisation because of variation in rate of taxable depreciation and difference. Due to the additional payment related to depreciation, the organisation need not have to incur the excess tax in the upcoming year; hence, it is adjudged as an asset. For deferred tax liabilities, they generally occur because of the temporary differences in profits and thus, the organisation needs to incur lower amount of tax in the existing year. The organisation needs to pay the remaining amount in the upcoming years and thus; they are taken into account in the form of liability. Answer 5: Income tax payable or current tax asset is adjudged as a significant aspect for the business firms. According to the annual report of Elanor, it could be observed that the income tax paid is $631,000 in 2017; however, there is absence of income tax payable in the year 2016. In organisations, it could viewed that there is a variation between income tax expense and income tax payable and some particular reasons could be held accountable for such disparity. The primary reason is the presence of deferred tax assets. There are many examples, in which the organisation incurs additional tax amount in contrast to the tax expenses (Dyreng et al. 2016). Under such condition, the additional amount of tax paid would be adjudged in the form of deferred tax assets, which forms the difference. The next reason is the difference between the norms of tax accounting and the norms of financial accounting. Under such aspect, the instance of depreciation could be mentioned. The variation for depreciation could be viewed under tax accounting and financial accounting for various rates of depreciation (Dyreng et al. 2017). Hence, the amount of final depreciation could be either raised or declined. These are the primary reasons behind the variations between income tax expense an d income tax payable. Answer 6: According to the financial statements of Elanor, the organisation has provided description regarding its tax payments in the income statement and cash flow statement. However, it could be found that it has published two distinct set of amounts in both the above-depicted statements. In case of Elanor, the tax expense of the organisation has been $768,000 in 2017 and $927,000 in 2016. On the other hand, the income tax payable of the organisation has been identified as $631,000 in 2017; however, there is no such payment in 2016. There are some particular reasons for this difference regarding income tax payment. In accordance with the income statement, the organisation depicts the entire amount of tax expense by charging the tax rate of 30% on profit before income tax. However, the case is not similar for the cash flow statement. Under such cash flow statement section, there is different treatment related to some items of the income statement. It signifies that various changes occur in current assets and liabilities of the organisations. For Elanor, the income tax payment is taken into account as current asset. In the cash flow statement, some minimisation in the items of income tax has been made depicting the utilisation of cash. This signifies that some items of tax expense have been eliminated before they are considered in the cash flow statement (Goh et al. 2016). Due to these reasons, the variation in tax expenses could be viewed in income statement and cash flow statement. Answer 7: After careful evaluation of tax treatment in the annual report of Elanor, it could be stated that no confusing or surprising element is inherent in the treatments of tax. The organisation has carried out all its tax treatment by adhering to the norms and regulations of the Taxation Law of Australia. Moreover, it has provided all the justifications and descriptions of different taxation factors like deferred tax assets and liabilities, tax rate, current tax assets and others. However, some interesting factors have been found in the tax treatment of Elanor Retail Property Fund. The significant factor is the description of the organisation regarding the variation between overall tax expenses. Moreover, it has provided descriptions regarding the primary factors accountable for differences in tax expense. Another significant factor is the variation in tax payment in income statement and cash flow statement. All such factors are useful in improving the understanding and knowledge in taxati on of the organisation. From this evaluation, both insight and knowledge could be obtained about the tax treatment of Elanor Retail Property Fund. References: Armstrong, C.S., Blouin, J.L., Jagolinzer, A.D. and Larcker, D.F., 2015. Corporate governance, incentives, and tax avoidance.Journal of Accounting and Economics,60(1), pp.1-17. Atanasov, V. and Black, B., 2016. Shock-based causal inference in corporate finance and accounting research. Cheng, B., Ioannou, I. and Serafeim, G., 2014. Corporate social responsibility and access to finance.Strategic Management Journal,35(1), pp.1-23. Christensen, D.M., Dhaliwal, D.S., Boivie, S. and Graffin, S.D., 2015. 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