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Logic behind ratios
AFM
answered on 15-Dec-24 11:03
Sir, i am actually not able to understand the logic of earlier ratios, like market conversion price, conversion premium and ratio of conversion premium. Could you please explain the logic behind the formula as i am neither able to self explain nor able to remember.
latest answer
A Conversion value of a debenture = MP of Eq shares x No of shares issued per debenture on conversion B Market conversion price = What is the implied price of one equity share = current market price of debenture / Number of equity shares allotted on conversion C Conversion premium = B - CMP of Eq share D Ratio of conversion premium = C / CMP of equity share x 100 E Premium over straight value of debenture = (CMP of debenture - Straight value of Debenture) x 100 / Straight value of Deb F Straight value of debenture = value of pure deb excluding value added due to conversion option G Favorable income differential per share = (Interest Income that you earn in excess on bond compared to dividend income on equivalent shares allotted on conversion) / shares allotted on conversion; this measures per share how much is a bond better than share in terms of interest income H Premium Payback period = Conversion premium computed above C / (G i.e Income differential). This measures how many years will it take to recover the conversion premium - this last one is a very weird formula provided by ICAI because it considers both measures that are in company favor - i explained at minute 10.30
Hrishikesh Pradhan
CA Final
★ 18K+
2
234
Exchange
Financial Reporting
answered on 14-Dec-24 15:33
Sir, 1. Timestamp @ 07:51 - In case the transaction has commercial substance and the FV of asset acquired is more evident, Isn't the investment property to be measured at Rs. 10,00,000 (i.e., fair FV of building acquired at Rs. 8,00,000 + cash paid at Rs. 2,00,000) instead of measuring it only at Rs. 8,00,000 (as FV of building acquired)? Would the entry then be like: Investment Property A/c .............. Dr. 10,00,000 To Cash 2,00,000 To PPE (Warehouse) 5,00,000 To Gain on disposal 3,00,000 2. Or, Is monetary asset value (if any) considered when and only when the FV of asset GIVEN UP is evident?
latest answer
Thanks Sir, It's very clear now.
Denz Philip
CA Final
★ 10K+
2
229
Profit and loss account
Financial Management
answered on 14-Dec-24 13:14
Actually in b/s Liabilities side equity, profit and loss account of certain year, long t liab , c.l Assets side LTA (plant), CA But here profit we wrote on source side which is next to plant assets
latest answer
Please elaborate your question. Have not understood what you are trying to ask
anju B
CA Inter
★ 21K+
2
493
SA-260
Auditing
answered on 16-Dec-24 16:33
Can you please explain the point highlighted in orange.
latest answer
👍
Varun Endukur
CA Final
★ 4K+
8
512
Conversion parity price
AFM
answered on 14-Dec-24 13:16
Sir, did not understood the concept of Conversion parity price
latest answer
It is the price of shares at which the price of shares x No. of shares received on conversion of bonds to shares = price of the convertible bond
Hrishikesh Pradhan
CA Final
★ 18K+
1
642
Audit engagement letter and Auditor Appointment
Auditing
answered on 14-Dec-24 21:47
Greetings sir/mam, Could you please clarify which of these letters will be given first? Is it an Auditor Appointment Letter or Audit Engagement Letter Please explain
latest answer
Thank you mam 🙏
Preethi Vijaya Kumar
CA Inter
★ 530
6
1K+
Question no.7,IND AS 16
Financial Reporting
answered on 14-Dec-24 08:31
sir, in question no.7 overhaul cost 5 millions but in the solution how it become 6 millions please clarify me.
latest answer
5 million is original estimate at time of purchase
Ramakoti Reddy Banala
CA Final
★ 0
2
175
Calculation of Revised Price
AFM
answered on 14-Dec-24 09:03
Sir, when i was solving it, i used our regular formula i.e P= C/1+y + C/(1+y)^2+......+C/(1+y)^6+M/(1+y)^6 using YTM as 17.75% and i got the answer as Rs 938.22 which is close to your answer of Rs 938.14, will my working work in exam?
latest answer
Ok sir, understood! Thank You
Hrishikesh Pradhan
CA Final
★ 18K+
2
858
Illustration 1
Financial Reporting
answered on 21-Dec-24 07:54
I couldn't understand why Tax expense reduce by 150, sir ?
latest answer
We created a deferred tax on difference. Now once depreciation on higher amount is charged, the difference will reduce. So it is like reversal of deferred tax liability which was created.
Swathi S
CA Final
★ 975
1
187
Cash vs funds
Financial Management
answered on 14-Dec-24 10:42
What's the exact difference between funds flow and cash flow statements? Please explain practically
latest answer
Cash flow vs funds flow
anju B
CA Inter
★ 21K+
1
1K+