[caamelaihan]

Dear Fidget,

Thankyou so much for such a well explained answer. This certainly answers my question.
Thank you again.

[caamelaihan]

Is COSO still examinable is P1 ? For risk management? Should I revise it?

[caamelaihan]

It was easy. What did you all think of the following questions:
1) Treatment of compound interment 5% $10 million convertibles as 100% equity??
2) Treatment of Loan gauranteed by Borough for Hamlet.

My answers were:
1) YOu can’t treat convertibles as 100% equity as it reduced the finance cost from almost 735000 to 500000 and also turned liability of 9,091,0000 into equity which is basically creative accounting

2) The loan would be contingent liability of $10 millions as it has been guaranteed by Borough. Rest $12million would be offset by current value of assets. Remaining $3 would be provision because Borough could be sued for that amount and if it is likely to loose then they need a provision

[Author]

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