Dear John,
Can you please explain me the tabular approach to multilateral netting. I didnt get any idea from examiner answer and kit as well.
1. What they mean by owed to and owed by at the same time. How we know which subsidary has to pay which one.
2. How they calculate the figures in table afer getting spot mid rates. Can you show me like one or two figure in table. i.e 1316.6 and 877.7
Can you please explain that tabular approach of solving the multitateral netting question?
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kenduri Co Part b
9y ago#1'Owed by' is the person who owed the money; 'owed to' is the person who will get the money.
(So on its own, Kenduri would have to pay US$ 4.5M to Lakama.)
Lakuma (US) owes Kenduri (UK) US$2.1M. Converted at 1.5950 gives GBP 1316.6
Gochiso (Japan) owes Lakama (US) US$1.4M. Converted at 1.5950 gives GBP 877.7
It doesn't matter which way you set up your table - there is no rule. You are simply trying to add up the total net receipt and total net payment for each company.
So its all i understand is about payment and reciepts to get finally Net payment or Net Reciept. Rite
Well Thanks John.Your answer always make a good sence.
9y ago#3You are welcome :-)
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