Foreign exchange definition/meaning

answered on 27-Jan-24 08:28

Why did they include deposits n other credit payable in foreign currency, AND drafts ,BOE etc drawn in one currency and payable in other, in the definition of foreign exchange? Because when we say we have forex reserves, having foreign currency makes sense (that we can call it a reserve, like something positive) but how can we call foreign loans or drafts payable in foreign currency as our reserves ? Is it positive in that sense?

latest answer

When entities hold deposits or have credit payables in foreign currency, these are considered as part of foreign exchange because they represent financial assets or liabilities denominated in a currency other than the domestic one. Foreign exchange reserves are not limited to foreign currency only, they include all the financial assets which are denominated in foreign currency.

Garima Bhargava

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450

Discounting Rate

answered on 23-Jan-24 10:55

[Timestamp @ 10:12] Sir, are there any cases where the yield of one bond in the portfolio differs from that of the other bond? If such cases exist, then which discount rate (i.e., the yield of which bond in the portfolio) has to be chosen to arrive at the PV of the investment? Thank you.

latest answer

Yields differ because of maturity and credit rating. In all our problems we usually assume credit rating is same. You should choose the yield a bond whose maturity is same as investment , as discount rate for investment

Denz Philip

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210

Amalgamation

answered on 23-Jan-24 10:24

In realisation account why we haven't take debentures and loan from A. And taken trade payable?

latest answer

In the question it is said that the transfor company transferred only trade payable. So It got assumed that other liabilities got settled by transfor itself not taken over by buying company.

Abhishek Sahu

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364

Capital gain

answered on 23-Jan-24 18:47

Please only explain the highlights (iii) (v) wrt amalgamation & demerger respectively, in context with share holders holding less than 75% of the shares

latest answer

Thank you so much

Sushmita Chowdhury

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Question from Chapter Investment decision

answered on 23-Jan-24 14:39

Illustration No: 25 Sir, while computing IRR , from PVIF @20% we got the answer negative Rs.15,250. But still you compute CF using another Interest factor I.e, PVIF @15% and got the IRR as 17.6%. But I did the solution just compare with PVIF @ 10% and 20% only and answer comes to 17.78% as IRR. There is a slight difference in answer that is 0.18% . Is it correct ? Can we do so ?

latest answer

The upper and lower bounds should be as close as possible you cannot do 10 and 20; you have to be closer.

Sindhu H M

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333

Auditing

answered on 22-Jan-24 23:06

What's meant by auditing,what is the need of this

latest answer

Its examination of financial statements, whether they give true and fair view. its done to enhance the confidence of stakeholders

Mukkanna K

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194

Beta

answered on 22-Jan-24 18:24

What is the difference between leveraged beta & unleveraged beta? Whether asset beta & leveraged beta are same? Also how to identify in the question that the beta of debt be zero?

latest answer

The inclusion of debt beta in the computation of the asset beta is to account for the financial risk that the debt adds to the firm's equity. The formula you've shown adjusts the equity beta for the effect of financial leverage (debt). Here's the reasoning: equity Beta : This is a measure of the risk of a company's equity relative to the market. It is "leveraged" because it reflects not just the business risk but also the financial risk due to the company’s debt. Debt Beta :This represents the risk of the company's debt also relative to the market. Generally, the debt of a company has some risk (though it's usually quite low compared to equity), especially if the interest rates are variable or the company's ability to meet its debt obligations is uncertain. Asset Beta : This is the unleveraged beta, reflecting the company's business risk without the effect of its capital structure. It is what the company's equity beta would be if it had no debt. When you adjust the equity beta for the impact of debt, you essentially strip out the financial risk to get the pure business risk (asset beta). Even though the debt beta is often low, especially for stable companies, it's not zero because debt holders require a risk premium above the risk-free rate, albeit much smaller than equity holders. Therefore, the formula provides a way to calculate the asset beta by considering both the equity beta and the proportion of debt adjusted for tax benefits, along with the debt beta to reflect the small amount of market risk associated with the company's debt. The tax shield (D(1-t)) is included because debt interest is tax-deductible, reducing the cost of debt and thus affecting the overall cost of capital.

VISAAGAN R

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670

Form 112

answered on 23-Jan-24 09:28

I had not completed any graduation degree. I am planning to register bcom in IGNOU ( as per MOU between IGNOU and ICAI) .. I had to apply for articleship under new scheme within 2 days .. Please guide me on how to apply for bcom under IGNOU. Is it possible to register for bcom and articleship within 2 days?

latest answer

Yes, you can do so.

Sajeetha R

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Residential status qstn 6

answered on 30-Jan-24 14:25

I got Mr X residential status as Non resident bcoz of deemed resident provision . Is it right?

latest answer

There are extra questions in material for practice. In AY 24-25, he will be ROR since he can satisfy second basic condition and both additional conditions together. AY 23-24, he will be NR since he cannot satisfy 182 days condition.

1 Minute Review

CA Inter

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401

Residential status

answered on 30-Jan-24 14:16

I got Mr X status as Not ordinary resident. Is it right?

latest answer

RNOR. Additional condition is not satisfied.

1 Minute Review

CA Inter

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