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Solution to the mcq
AFM
answered on 27-May-24 10:01
Solution to the below attached mcq
latest answer
Pls share your working and where you have a doubt?
MATURU HAMSA GAYATRI
CA Final
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1
369
investment property doubt
Financial Reporting
answered on 27-May-24 13:10
how an item let out under finance lease can be consider as investment property??
latest answer
An item which is held for letting out on finance lease is IP. Once leased out, 116 applicable.
Sanoj C Sunny
CA Final
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2
402
ill-23
AFM
answered on 28-May-24 09:54
what is the difference between ill21 and ill23 ? in ill21 P/E-7.5 the retained earning being 37.5% is rs 3 so in that we found eps as 8 but in ill23 P/E-8 the co retains 50% 0f earnings rs10 , in this case we took EPS as 10 why not 100*10/50 eps is 20 . whether this may silly question but while doing sum i worked out eps 20 then in vedio its different .
latest answer
You have to read question carefully.
HEMAVATHYSUBRAMANI SUBRAMANI
CA Final
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3
327
Advanced Capital Budgeting Decisions, Illustration 26
AFM
answered on 26-May-24 16:19
It was mentioned that acceptable level of risk is 20%, can we assume that IRR is 20% assuming that management doesn't accept any negative NPV.
latest answer
No what I have done in last 2-3 minutes is only right Risk is not disc rate
Raviteja Kusumanchi
Qualified CA
★ 42K+
1
489
What if we settle through delivery ?
AFM
answered on 26-May-24 16:09
Hi sir, Since they did not say anything if we assume he is already having the rice with him on day zero itself. And he wants to sell it after 3 months, so he entered into future @ 59 per kg. then on the date of maturity he will sell deliver the Rice and receives the money 59 per kg. Then he make profit of 2rs( spot of 57 and sale price of 59) right ?
latest answer
Yes
B. Dinesh
CA Final
★ 3K+
1
388
GTA Sec 9(3)
Indirect Taxation
answered on 29-May-24 12:35
If GTA is providing services to other than individual then in such case Forward charge 5 % - NO ITC, my doubt is if it is Reverse Charge then also it is 5 % but does it get eligible for ITC ?
latest answer
In case of RCM, recipient has to pay such tax under RCM and such tax paid under RCM can be claimed as ITC.
Harish Chandar T
CA Inter
★ 5
2
464
Buyer and seller of commodity derivative
AFM
answered on 28-May-24 14:42
Hi sir, In class you said Buyer of the commodity derivative deposits the Margin and Seller of the commodity market Accepts the margin. But the picture in the background states otherwise i.e Seller deposits Margin and buyer accepts the margin . please let me know which is correct. attaching the picture here for your reference
latest answer
Updated the video - thanks for highlighting
B. Dinesh
CA Final
★ 3K+
2
322
American option is greater than European Option
AFM
answered on 25-May-24 22:26
Hi sir, the question we solved is American put option(Abandonment option) and the value of the option is 52.7 million atleast.i will tell what i understood by the word "atleast" , please correct me if iam wrong. Normally BSM is used to compute European options value, here we used that even though it is an american option. So in European option value computing method i.e. BSM itself we are getting the option value as 52.7 million, in american option value computing method i.e. Binomial we will definitely get the option value more than 52.7 million. That's why we used "atleast"
latest answer
yes 100% right
B. Dinesh
CA Final
★ 3K+
1
464
Dividend treatment in Black scholes formula
AFM
answered on 25-May-24 20:11
Hi sir, in this question you said if there is a dividend it will get adjusted at two places i.e. In call option value formula at 'Spot' value and in d1 formula at 'r'. But in previous question no. 22 part 4, you said just to adjust the spot with PV of dividend and use the normal formula. by doing this we are giving the effect in Call option formula same as above. But the 2nd effect in d1 is not provided here na. Why is this sir ? Is it bcz its real options ?
latest answer
Ideally dividend should be adjusted at both places. ICAI has chosen to follow this weird method of adjusting dividend with spot in case of normal options and in both places in real options. They come up with their own explanations and interpretations
B. Dinesh
CA Final
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452
Illustration 4
Financial Reporting
answered on 27-May-24 14:54
In Illustration 4, if there is an impairment loss, Whether PPE to be reclassified as Investment Property at Carrying amount or Fair value ?
latest answer
If there is impairment loss, the asset will be valued at its recoverable amount (higher of fair value less costs to sell or value in use). This will be the carrying amount for reclassification. Please note that when the standard says that revaluation model is not permitted, it does not mean that impairment is not applicable.
Swathi S
CA Final
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205