Forum Replies Created
- Posts
Okay, so for SBR it is enough to know that market conditions are already incorporated in the fair value of the equity instruments?
Thank you.
I am sorry I didn’t understand it.
Does that mean Factory A is a CGU along with it admin and finance? Isn’t admin and finance a part of the factory?Okay. But in Kaplan test your understanding 21, 22, in cashflow hedge accounting one is futures contract for gold and it is solved as Financial Liability recycled through P and L,
whereas in another question its a forward rate contract for buying a plant and its not taken as Financial asset/liability because its adjusted against the carrying value of the plant.I do not understand why they have different treatment?
Texts show as if effective and ineffective portion is for cashflow hedge only and it confuses a lot but as you said since everything goes to the P and L, no difference reported.
Thank you very much
One more question please..
In fair value hedge, why do we not differentiate between effective portion and ineffective portion of hedge?
Would it be fine if I say I didn’t get it clearly? Can you please rephrase it a bit?
Replacement when it’s needed by the lessee, in this case, the lessee will have the right to use asset, correct?
Okay.. Sir, my question is that why is liability a part of right of use asset? I don’t understand the logic behind liability being part of an asset cost, please?
And one more question please,
Is cashflow hedge a binding contract?
In Fair value hedge I have gathered, it is binding, you got to pay and receive the same amount that has been decided in futures contract.
Right, I understand that.
If movement in hedging instrument is greater than the movement in hedged item than the exess will be recognised in P and L.
But what exactly is meant by “effective portion”. How is it effective, please?
And one more thing please,
Tax base of Zero and Tax base Nil, are they both same?
Thanks.
Hello Tutor,
In this question, the advantageous market has been identified as Export Market. For Principal market, since some of the information is missing on domestic market – direct to retailers, the answer says the principal or most advantageous market will be presumed to be the market in which Mehran would normally enter into the transactions which would be export market. However the question clearly says that Mehran sells directly to manufacturers (second domestic market) with the greatest volume of transactions, whereas in export market, Mehran needs a licence from government to export its product and there is a limitation too, which gives a hint that Mehran has not entered the market yet.. So instead of export market, would it not be Domestic market – direct to manufacturers to be as Principal Market?
Thanks.
Okay. This was copied from BPP Text book. because I was reading a question from BPP kit and there I read about all this so that is why referred the book.. I don’t remember the question name at the moment.
Apart from exam questions, is it recommended to read questions from the exam kit, cause there I get stuck.
Thank you.
