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Additional Investments in Associates
Financial Reporting
answered on 10-Oct-24 11:20
When we acquire additional 15% on 1/4/x2 we have checked and took it as an Associate. While computing share of Entity A shouldn't we take 15% of 4400=660; since we have already acquired 5%. Also when computing the consideration paid, we have already taken for that 5% as an existing stake for 275.
latest answer
previously it was not an associate. We check share of net assets on the date the entity became an associate. So on the date it became associate, the share in net asset is 20% On amount paid - we paid 15% now and 5% earlier.
S Shriram
CA Final
★ 0
2
167
Net Working Capital - Bank Overdraft included?
Financial Management
answered on 07-Oct-24 19:25
Following information has been provided from the books of M/s Laxmi & Co. for the year ending on 31st March, 2020: Net Working Capital ` 4,80,000 Bank overdraft ` 80,000 Fixed Assets to Proprietary ratio 0.75 Reserves and Surplus ` 3,20,000 Current ratio 2.5 Liquid ratio (Quick Ratio) 1.5 You are required to PREPARE a summarised Balance Sheet as at 31st March, 2020 In the answer (see page 6 of the PDF attached below) they have arrived at Current Liability as 3.2L by using the net working capital figure and current ratio. However, a Bank Overdraft of 80,000 is there, and ICAI material (Page 3.8) has mentioned that in Net Working Capital, Current Liabilities excludes short term bank borrowings, which a bank overdraft is, right? So shouldn't we equate Current Assets - Current Liabilities with Net Working Capital + Bank Borrowings, to adjust for the exclusion?
latest answer
Ok sir, thank you so much!
Vishnu Muraleedharan
CA Final
★ 32K+
2
1K+
P management
CFA
answered on 07-Oct-24 12:35
i understand risk averse investor pls explain what is most-risk averse inv and less-risk averse investor and pls explain optimal portfolio
latest answer
Most risk average means a very safe investor - a very safe investor will not tolerate risk i.e for small risk they want great return - i.e the utility that they require from small risk is very high Utility curves plot satisfaction derived from consumption of something In Portfolio Management if we plot utility curves for SD on x axis and Retrun on Y axis, then people who are more risk averse will have utility curves towards left that is more steep and people who are less risk averse that is are willing to take risk have indiferrence curves towards the right ( look at image attached) Now if utility curve is steep i.e the slope is highest The way to understand it is if eq of a line is y = mx + c Where y is desired return and m is slope, c is intercept and x is sd Then for a given SD, an investor with who is more risk averse i.e who hates risk will want more return so slope will be very high So answer will be c
Dhakshana Dhakshana
CFA L2
★ 18K+
4
656
SA 300 Planning an audit of Financial Statements.
Auditing
answered on 11-Oct-24 08:57
The Auditor should summarise the Audit plan by preparing an audit planning memorandum. For example, the expected scope and extent of audit procedures, Risk assessment activities.Analysis of this sentence in accordance with SA 300 "planning an audit of Financial Statements." Also Elucidate such matters.
latest answer
An audit planning memorandum is basically a comprehensive document which outlines the entire audit plan before the audit begins so that the audit is completed effectively and effectively. It’s a part of audit planning. Matters included- example - teams members , their roles and areas - time table- deadline for completing each area - whether the use of expert is needed or not -materiality levels -understanding of clients business
Rana Darshan
CA Final
★ 810
1
917
Reserve
Financial Reporting
answered on 07-Oct-24 11:16
Sir why we don't add reserve in consolidated balance sheet
latest answer
We add post-acquisition reserves of subsidiary in consolidated reserves. Pre acquisition reserves are not added but considered while calculating goodwill. is this what was your query?
Suman Hs
CA Final
★ 2K+
1
201
Joint venture or joint operation
Financial Reporting
answered on 10-Oct-24 11:32
Sir, if it identified as Joint venture; should we need to consider Investments and capital for computation of Net assets?
latest answer
Net Assets = Total Assets - Liabilities. If investment is made by JV, you will consider.
S Shriram
CA Final
★ 0
4
214
Formula of Step 4 of Replacement Decesion
AFM
answered on 07-Oct-24 10:21
Sir in the formula sheet Step 4 given as Step 1 + Step 3, Isn't is Step 3 - Step 1
latest answer
If CF outflow numbers are computed in negative, then it is Step 1 + Step 3 That is the intent - but anyway will add a suitable note beside it in the formula sheet - thanks for highlighting
Hemachandra D
CA Final
★ 9K+
1
584
question
Indirect Taxation
answered on 09-Jul-25 17:06
p private ltd question i did not understand.......?
latest answer
ok sir, understood it. thank you sir
Saniya Balekai
CA Inter
★ 285
4
224
Theory of afm
AFM
answered on 06-Oct-24 19:54
Hi sir, please give important theory expected questions of each chapter like how you gave problems. It will be helpful for us.
latest answer
Thank you sir.
Jaswanth Sai
CA Final
★ 0
2
501
Ch . Place of supply
Indirect Taxation
answered on 08-Oct-24 17:03
If there are two businesses registered in SEZ unit say X and Y . If transaction takes place between X and Y , what is gst to be levied on it ? Is it zero rated supply and is it a intra state transaction?
latest answer
Pamar
Anirved Rahatgaonkar
CA Inter
★ 0
4
580