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Gearing ratio

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

Viewing 4 posts - 1 through 4 (of 4 total)
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  • April 21, 2019 at 5:23 pm #513679
    chinny98
    Member
    • Topics: 30
    • Replies: 16
    • ☆

    Morning Sir,

    I would like to ask do we need to include deferred income related to government grants in calculating the gearing ratio?

    Thanks you so much

    April 22, 2019 at 8:20 pm #513788
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7065
    • ☆☆☆☆☆

    Hi,

    No, the deferred income is not debt and so it is not part of the calculation.

    Thanks

    April 27, 2019 at 2:46 am #514281
    chinny98
    Member
    • Topics: 30
    • Replies: 16
    • ☆

    as to what I saw from bpp books, deferred income can choose to be included or excluded in calculation of gearing ratio? is that true?

    April 30, 2019 at 8:27 pm #514632
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7065
    • ☆☆☆☆☆

    Hi,

    It would depend on if the deferred income is interest bearing or not. If it is then it would be included, but I’d have thought that this is relatively rare.

    Thanks

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