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Residual Income

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA APM Exams › Residual Income

  • This topic has 1 reply, 2 voices, and was last updated 10 years ago by Ken Garrett.
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  • May 28, 2015 at 1:16 pm #249827
    samiirah
    Member
    • Topics: 22
    • Replies: 20
    • ☆

    Please let me know; do we take net profit after interest and tax for caculating
    RI or Profit before interest and tax

    May 28, 2015 at 3:40 pm #249883
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10604
    • ☆☆☆☆☆

    Before interest and tax, but in a divisional performance situation it is relatively unlikely that interest and tax will be shown as these will be taken care of by head office.

    The notional interest charge takes account of interest on the capital employed by each division.

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