hello Sir,
I have one question :
For calculating Capital employed as per BPP we need to take average of Opening and closing balance of FS however while I was going through your notes it is mentioned that we need to take opening balances while calculating..
I am bit confused here..
please help ..
Thanks in advance
Ask the Tutor ACCA PM
ROI
5y ago#1There is no set rule - in practice it is most commonly calculated at the end of the year using the closing balance.
It depends on the wording of exam questions. Sometimes you are only given the closing capital employed in which case there is no choice.
Although using the average balance is logical when you are given both opening and closing balances, the examiner often uses the opening balance (if given) on the basis that it is the assets at the start of the year that earned the profit.
I do not believe that our notes say anywhere that we should take the opening balances (although do correct me if I am wrong :-) ), and I do assume that you are not using the notes without watching the lectures because that would be completely pointless.
Yes sir I have watched the lectures and now referring to the notes .
And no sir its not specifically written...
Sign in to reply to this topic.