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Hi Sir,
I’m looking at question 56 in bpp revision kit called NTC. I don’t understand why the solution says the amount of 210 is a receipt. I thought this is a payment since payments are read down and receipts across. All these currency amounts seems to be opposite of what I thought they should be.This kit is up to June 2015. Is it too old do you suggest I get a newer book. I’m due to sit in March 2016 for the first time.
Thanks for any help you can give on this.
MarieI assume that you mean the E210 between Spain and the UK.
You read across for the receipts, so the UK is receiving E210. (You read down for the payments, so it is Spain who is paying the E210 to the UK).
Your kit is OK – the syllabus has not changed – but do download the more recent past exams from the ACCA website.
Thanks, Sir I looked at it again and I want to make sure I understand. Take Hong Kong in the same question, there is a payment of 720 and a receipt of 400, making a net payment of 320. The solution states a that the payments and receipts can be netted off and then shows a 320 receipt.
How can the bigger payment net to a receipt?
Thanks again,
MarieThe UK (reading across) has a receipt from HK of 720.
HK (reading across) has a receipt from the UK of 400.So the UK which is where the company is based) ends up with a net receipt from HK of 320.
(Alternatively, the UK (reading down) has a payment to HK of 400.
HK (reading down) has a payment to the UK of 720.
So the UK has a net receipt of 320)Dear John Moffat
Kindly assist me with how to go about finding the payment/receipts amounts when exchange rates are, for example given as in the Hybrid questoin two called “The Amstrong Group” I know how to find the amounts by diving each amount per say with the middle rate but in the case of questions like this how did they calculate the amounts 12.17, 3.97, 3.88, 19.78, 2.13, 2.98 and 2.11. I really feel frustrated because I ve known Netting questions to be quiet friendly
The rate to be used are given in the table in the question.
So US$ 12.17 is already in $’s and so doesn’t need converting.
SAR 42.65 – the exchange rate in the tables is given as 1 US$ = 10.7296, and therefore it converts to 42.65 / 10.7296 = US$ 3.97
(or alternatively, 1 SAR = 0.0932$’s from the table, so 42.65 x 0.0932 = US$ 3.97)I hope that makes sense, because it is the same approach for all of them 🙂 )
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Dear John,
I’m doing a netting question Multidrop (06/10). Question (a) asks us to calculate the INTER GROUP & INTERCOMPANY currency transfers from Multidrop Europe. Is it correct to include the non group companies too? I left them out because I thought that these are not inter-group transactions but they’re there in the answer.
Could you please clarify?
Many thanks!
Yes – it is correct.
You are right in saying that the non-group transactions are not inter-group (and therefore if the question had only referred to inter-group transaction you would have left out the others).
However, the question asked for the inter-company transactions as well, and these are the transactions with the non-group companies.
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Thanks for the quick reply! 🙂
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