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Sir,
The question says:
“Property, plant and equipment includes land and buildings valued at $25 million, over which a fixed charge exists.”
Could you please briefly explain what does FIXED CHARGE over fixed asset mean and why 25m value is important here? To indicate approximate size of liability? Has it any relation to operational or finance lease?
I do not understand the wording…
A lender of money has accepted a fixed charge over the asset as security. The security applies only to those land and buildings and not to other assets
The impact is that, should the borrowing company fail in the terms of the loan agreement, the lender is legally able to take ownership of those land and buildings and sell them in order to recover the value of the outstanding loan
OK?
(This is F4 stuff!)
Hello sir,hope you are well.
In part a) in the answer,when analysing net liabilities it states the co.made retained loss of $620m in the year ended 20X1. I fail to understand how they got this figure?
Thanks
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