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In any case thanks a lot.I will try to formulate my questions more specifically in future.
Hi
I think that I have found the original ACCA paper.Pleas,if it is possible look through Paper 2.4,chapter 5 working capital.introduction,page 79,”Ewden” Plc.I would like to repeat my question.
i am looking at the solution of that example there are the main factors of overtrading but is concluded that overtrading is absent.
ThanksSorry for misunderstanding.I use the translated version of ACCA papers and maybe there are some inconsistence.
I will try to check and write you the correct reference.Paper F5 Performance Management,the title of the chapter is “working capital management.introduction”
Please,help me to understand the following
there is an example “ewden” at the end of the chapetr 5, i am looking at the solution there are the main factors of overtrading but is concluded that overtrading is absent.
thanks.Hi
sorry for lateness.the title of the chapter is “theoretical questions” (if our books are the same)and my question represented as a diagram.Yes,you have understood correctly.The question is from chapter 3.I will try to explain my question in detail.Its related to current cost calculation system.
Definitions
the indemnification cost is maximum (econamic value,net realisable value),according to calculation by current cost the assets must be recognized as minimum(replacement cost,indemnification cost).Now lets assume that the indimntfication cost = NRV => we have to compare replacement cost with NRV.
Sorry for bad English.