Forums
Return on capital employed
Financial Management
answered on 11-Sep-24 20:20
Why we included intrest component in pre tax return [by calculating EBIT instead of PBT for pretax return ]and post tax return [PAT +interest instead of just PAT] what's the reason (....still doesn't concluded my mind with this formula)
latest answer
Capital Employed is Debt + Equity + Pref So Denominator is all providers of capital, so when we compute return, the numerator also should have return attributable to all shareholders. ICAI has this weird formula of PAT plus Interest, where Pat is for equity shareholders and Int is for debt holders Practically most people use EBIT x (1-t) . Here EBIT reflects earnings available to all capital providers
anju B
CA Inter
★ 21K+
1
577
CA Final- Paper 4
Others
answered on 08-Sep-24 16:39
Hello Team, Will you be launching classes for CA Final Paper 4 - Direct Tax and International Taxation?
latest answer
At the moment NO plans for it. If we do, we shall let you know
Irfanah Ilias
CA Final
★ 48K+
1
452
Foreign exchange management act
Corporate & Other Laws
answered on 09-Sep-24 08:14
What is the residential status of a person who has stayed in India for a period less than 183 days in the preceding FY and has come to India for employment?
latest answer
Thanks
Yazhini 1406
CA Inter
★ 280
9
528
Retained earnings
Financial Management
answered on 11-Sep-24 16:44
The reason for retained earning cost is same in both cases!
latest answer
Please re post the doubt clearly
07- Issac Jolly-XII C
CA Inter
★ 16K+
1
394
Marginal wacc
Financial Management
answered on 11-Sep-24 16:51
If they want raise fund in next year... Then the given dividend will become D⁰ right? Then we should again make it D¹
latest answer
It is clearly mentioned in the question as expected dividend. Hence it is D1 only
07- Issac Jolly-XII C
CA Inter
★ 16K+
1
342
Term loan
Financial Management
answered on 08-Sep-24 12:19
In case of term loan, how is interest calculated (i thought it was on the amount we borrowed ) is it? But in this question the how did the interest is taken
latest answer
Interest amount divided by Loan Amount will give you the Interest % (Cost of Term Loan)
07- Issac Jolly-XII C
CA Inter
★ 16K+
1
328
AS 12 - Grant in the nature of Promoter's contribution vs for specific fixed assets
Accountancy
answered on 09-Sep-24 11:45
Alps Limited has received the following Grants from the Government during the year ended 31st March, 2021: 1. Rs.120 Lacs received as Subsidy from the Central Government for setting up an Industrial undertaking in Medak, a notified backward area. 2. Rs.15 Lacs Grant received from the Central Government on installation of Effluent Treatment Plant. I understand that 1 is a grant in the nature of promoter's contribution as it is being given solely by reason of being setup in the notified area. However, I feel that 2 can also be considered as such since it is being granted for the construction of the overall plant, which may consist of multiple individual PPEs. Answer key treats 2 as a grant for specific fixed assets. Would both answers be considered correct?
latest answer
The first grant (Rs. 120 Lacs) qualifies as a grant in the nature of promoters' contribution because it is aimed at incentivizing the overall investment in a notified backward area without being tied to any specific asset. The second grant (Rs. 15 Lacs) is specifically tied to the installation of an effluent treatment plant, which is a specific fixed asset. Hence, it should be accounted for as a grant related to a specific fixed asset and not as a grant in the nature of promoters' contribution. When we use promoter's contribution, it is for a business set up as a whole.
Vishnu Muraleedharan
CA Final
★ 32K+
1
717
IRRM - illustration 16
AFM
answered on 08-Sep-24 12:07
Q6 , Sir generally interest rates are quoted on beginning of year or ending of prev year ie ( reset date ) and payment will be on payment date based on interest rate on reset date right ? so here interest rate on 1/4/2012 ( reset date ) is 8.5 % and will be applicable for payment on 31/3/2013 and pay off would be zero right ? ( 8.5 % - 8.5 % ) , but why interest rate of 10.2 % is taken for pay off , it should be applicable for 31/3/2014 ? , I am missing some logic here please explain sir
latest answer
Your understanding is right and what we have done is also right We computed 10.2-8.5 for full year 2013-14. We never said the payoff is paid on 31/3/2013 The settlement is doe on 31/3/14 only. The column heading is 13-14 for the full year and yes the payment is made at the year end
Enuguru Sai Nithin
CA Final
★ 78K+
1
337
Journal Entries in Illustration 2
Financial Reporting
answered on 09-Sep-24 17:09
Why have we passed the 2nd and 3rd entry. I couldn't get the logic behind passing such entry, sir.
latest answer
When the entity held 30% stake, it accounted for the investments using the equity method. So share of exchange differences and share of revaluation reserve would be recognised in OCI. Now since control is established, the balance in OCI is transferred to retained earnings as it is no longer an associate.
Swathi S
CA Final
★ 975
1
188
Question 4
Indirect Taxation
answered on 08-Sep-24 22:04
As per sec 7(1)(c),Supply of goods or services or both between related persons or distinct persons when made in the courses or furtherance of business is treated as supply. But,in the ques 4- When Event management services are provided to her brother (related person) for his son's marriage function,for free of cost.Then, How can it be a supply since it is for personal purpose and not in the course or furtherance of business.(Marriage function)?
latest answer
Okay Sir.Got it,Thank you.
sravani kanigiri
CA Final
★ 140
6
414