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Hi Sir,
Please help to clarify for me the following issue:
I don’t understand the way they calculate the taxation in Working 5, in which the profit and the tax loss carried forward are used. This differs from what I’ve learnt in F9.
Why don’t they use the cash flow, tax allowance depreciation template as usual?
Thanks sir!
As I explain in my free AFM lectures, there are two approaches you can use to deal with tax. In Paper FM (was F9) you never have tax losses and so both approaches give the same result. However in AFM there are often tax losses involved and therefore you need to use the approach in the answer – I explain this (with examples) in my free lectures on investment appraisal.
@johnmoffat said:
As I explain in my free AFM lectures, there are two approaches you can use to deal with tax. In Paper FM (was F9) you never have tax losses and so both approaches give the same result. However in AFM there are often tax losses involved and therefore you need to use the approach in the answer – I explain this (with examples) in my free lectures on investment appraisal.I got it, thank you Sir
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