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Subsidised loan

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Subsidised loan

  • This topic has 3 replies, 2 voices, and was last updated 9 months ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
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  • November 6, 2021 at 12:57 pm #640060
    Mahrukh
    • Topics: 26
    • Replies: 38
    • ☆☆

    Hello John,
    Is there an issue cost on subsidised loan as well, as there is on normal borrowing? What to do if nothing is stated clearly?
    Thanks 🙂

    November 6, 2021 at 4:15 pm #640068
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 49902
    • ☆☆☆☆☆

    There is unlikely to be an issue cost (because it is a loan normally being given by a government. It is only when there is an issue of debt borrowing that there will be issue costs involved).

    If nothing is stated then there are no issue costs.

    November 7, 2021 at 4:30 pm #640178
    Mahrukh
    • Topics: 26
    • Replies: 38
    • ☆☆

    Exactly, I thought the same. But there is a question fubuki co dec 2010 where examiner has taken issue costs on subsidised loan as well, wonder why?
    Thanks for your assistance.

    November 8, 2021 at 7:29 am #640204
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 49902
    • ☆☆☆☆☆

    Because the question says that the issue costs are 4% of the gross finance required. It does not distinguish between the finance raised from the subsidised loan and that raised from the issue debt.

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