Provision

This topic contains 1 reply, has 2 voices, and was last updated by Avatar of MikeLittle MikeLittle 1 year, 5 months ago. This post has been viewed 36 times

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    edmundchan
    Participant
    • Topics: 16
    • Replies: 6

    Dear Mike,

    I do not understand the rationale behind the use of pre-tax discount rate in determining the provision amount. Would you mind advising me why?

    And other than provision, should we use pre-tax discount rate as well in discounting the financial assets, like the loan and other receivables?

    Thanks


    Avatar of MikeLittle
    MikeLittle
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    • Topics: 0
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    Hi Edmund

    We use it because that’s the rate which is specified – it’s not something which I’ve made up and could change next week if I wanted!

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