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Hi i did the f7 mock
Didnt understand a thing on this question
Investment at FVTPL: $27,500
Investment changes in direct proportion with a specified market index
On 31/12/2015 index stood at 2670 but it had risen to 2803.5 on 31/12/2015Find double entry.
I want to know how do you go about doing this question?
What even is the purpose of having the index on 31/12/ also rise 31/12/2015, meaning volatility in a day?
What even is market index in this case?
Is it something like basis point?
How to use this market index.I feel like this is the sort of thing “not available” in the acca textbook, and assumed general knowledge?
Hi,
I’d not get too stressed out by it as I think that in the exam you would simply be given the price per share and number of shares to work out the fair value at the reporting date.
In this question though it states that the value of our investment is directly linked to the change in the market index, therefore you need to look at by how much the index has changed and then apply that change to the initial value of our shares to get the reporting date fair value. Just think of the market index as the total price of all the shares on the market.
Try it and see how you get on.
Thanks
Hi,
Thanks.
I think i sometimes i stressed out about A LOT OF things going on with my life right now. I used to be so carefree and creative and chill. IDGAF what anyone thinks. I never cared about money. Never cared about petty things. Now its like the TOTAL opposite. Lol i think money changes one’s perspective a lot. God, i love god. One day i want to reside somewhere where its surrounded by mountains, greenery and nature, where the human population is 0.010% and i can have eco sustainable living, do yoga everyday and live with my baby sheep. Or i might be a fitter version of buddha. LOL
So anyway yeah i got $133.5 is this to be added to..? or is this question related to previous question?
Hi,
The increase is $133.5 but this needs to be expressed as a percentage of the opening value, so if you divide this by the 2,670 you should get an increase of 5%. You can then apply this increase of 5% to the value of our shareholding of $27,500.
Thanks
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