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Gearing

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Gearing

  • This topic has 2 replies, 2 voices, and was last updated 9 years ago by MikeLittle.
Viewing 3 posts - 1 through 3 (of 3 total)
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    Posts
  • March 11, 2016 at 11:29 am #305523
    pinkyjovin123
    Participant
    • Topics: 92
    • Replies: 134
    • ☆☆☆

    Sir,

    Which one would reduce gearing???

    Revaluation of an asset or,

    Selling the carrying value of an asset and leading it back under operating lease??

    March 11, 2016 at 5:19 pm #305694
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23327
    • ☆☆☆☆☆

    Is that the full question or were there other options?

    I would think that the revaluation of the asset would reduce gearing – it increases shareholders’ funds without affecting borrowings

    March 13, 2016 at 5:47 pm #306212
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23327
    • ☆☆☆☆☆

    Agreed, I stick with my first choice

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