Provision

This topic has 1 reply, 2 voices, and was last updated 13 years ago by MikeLittle.

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November 16, 2012 at 11:06 am #55381
edmundchan
Member
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Dear Mike,

I do not understand the rationale behind the use of pre-tax discount rate in determining the provision amount. Would you mind advising me why?

And other than provision, should we use pre-tax discount rate as well in discounting the financial assets, like the loan and other receivables?

Thanks
November 16, 2012 at 11:12 am #107634
MikeLittle
Keymaster
- Topics: 27
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Hi Edmund

We use it because that’s the rate which is specified – it’s not something which I’ve made up and could change next week if I wanted!
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