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1 more question, please- I tried using MMII to get the ungeared Ke but i think because of the clause which states that the Asset Beta applicable to the project is 0.4 more than current asset beta, my Ke,ungeared was not the same.
is it possible to use MMII and still get the same result as the ungearing method, with the 0.4 increase requirement? if yes, how?
Okay. The examiner did a separate working (W5) and deducted TAD from PBT, he then claimed Losses in year 2 and part of year 3 before deducting taxes.
I still do not understand why he did not add back the depreciation even in his separate working. (I hope this is not frustrating but i still don’t get it).
Two methods- Add tax savings on Depreciation/TAD OR deduct TAD, deduct tax and add back depreciation to PAT (RE:Trosoft), but in the examiner’s workings (W5), he only deducted then claimed back tax on losses made. There is no statement which states that the investment required to maintain NCA is equivalent to the amount of TAD (this would have been a reason not to add back).
it’s a bit inconsistent to me, how will i know when this type of working done by the examiner is required in the exam?
@ACCA Tutor, I understand that there are 2 methods of dealing with Tax allowable depreciation and know how to apply them.
However, in Tramont, the depreciation was deducted before tax but not added back as it should have been done, after tax.
is there any reason why this was done?