News - Written by Renai LeMay on Monday, May 2, 2011 17:12 - 6 Comments
Google Australia claims 2010 financial loss
The Australian division of search giant Google has filed financial accounts with the nation’s corporate regulator stating it made a loss of $3.08 million in 2010, paying just $7.4 million in taxes as a result, off local revenues of $151.39 million.
The company’s listed revenues jumped substantially over the 12 months, according to the statement, rising from $110.31 million in 2009, to $151.39 million for the year to December 31, 2010. Google’s biggest local cost was its 434 employees – which soaked up some $111.6 million in the period, meaning their average salary was a whopping $257,000.
However, the company also spent a great deal on advertising and promotional expenses — $10.53 million in 2010. Other major expenses included travel and entertainment – which was $7.13 million.
The company’s basic profit and loss statement only listed tax costs of $1.1 million, although the company was actually slated to pay some $7.4 million in taxes in 2010. However it balanced that figure out with deferred tax payments and adjustments.
At the end of the year, Google Australia was holding some $21.3 million in cash and cash, as well as $34.2 million of what it said were ‘trade and other receivables’. It had some $16.1 million worth of property, plant and equipment.
However, not everyone believes that Google’s disclosed finances reflect an accurate picture of the company’s local revenues – with industry figures and analysts having stated over the past several years that they believe Google to be making something between $650 million and $1 billion. As Google is not listed on the Australian Stock Exchange, it is not required to go into a great deal of detail about its local finances.
In the financial statements released last week, Google stated in the revenue recognition section of the documents that it had a number of agreements with other Google subsidiaries which guided how it recognised revenue.
”The company has a service agreement with Google Inc for the provision of research and development services, a service agreement with Google Ireland Ltd for the provision of sales and marketing services and a service agreement with Walkway Technologies US LLC for the provision of research and development services,” Google stated.
In a separate statement, a Google Australia spokesperson said: “Google complies fully with all relevant tax legislation in all the countries in which it operates, including in Australia. That means that we contribute to all relevant local and national taxation schemes – as well as providing employment for over 400 employees in Australia.”
A spokesperson for the ATO said the agency would not comment on the details of any specific taxpayer. Google’s financial accounts were audited by accounting firm Ernst & Young, and the company lists US-based global finance director Lloyd Martin and general counsel Kent Walker, as well as local director Mark Tucker, as the company’s director contacts. Google Australia lists law firm Baker & McKenzie as its company registered office.
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