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Basis

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Basis

  • This topic has 3 replies, 2 voices, and was last updated 6 years ago by John Moffat.
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  • August 19, 2018 at 8:25 pm #468550
    mjibola
    Participant
    • Topics: 131
    • Replies: 135
    • ☆☆☆

    I’m confused with basis points!

    If debt is available at 5.2% less 30 basis points, is this 0.052 – 0.003?

    If 10% less 100 basis points, is this 0.100 – 0.010?
    Correct?

    Mar Jun question 2. Please explain how there’s a “tax relief loss” for years 2 to 5?
    Thanks a lot.

    August 20, 2018 at 6:06 am #468569
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54719
    • ☆☆☆☆☆

    1 basis point is 0.01%.
    (so 5.2% less 30 basis points is 5.20 – 0.30 = 4.90%)

    With regard to your second question, please say for which year the question is in.

    August 20, 2018 at 6:18 am #468576
    mjibola
    Participant
    • Topics: 131
    • Replies: 135
    • ☆☆☆

    2018 sorry

    August 20, 2018 at 6:27 am #468584
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54719
    • ☆☆☆☆☆

    In year 1 there is a loss for tax purposes of 14,650. Therefore there is no tax payable, and the loss is subtracted from future years taxable profits.

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