- This topic has 4 replies, 2 voices, and was last updated 7 years ago by
.
- Posts
Hi chris,
Referring to the above question in calculating ratios PBIT,
Why is the overdraft finance cost is being the only one excluded from the calculation of PBIT.
What is the reason? Also please kindly state all the relevant circumstances (that would be asked in exam) needing PBIT to be adjusted in this manner or any other manner matter fact thats not, the usual (ie taken straight up from the face of the statement.)https://www.accaglobal.com/content/dam/acca/global/PDF-students/2012/f7hkg_2008_dec_a.pdf
The thing i dont like is when my previous understanding of a seemingly simple thing becomes complicated because of the additional new thing which require amendment.. ugh contradiction, duality, dissonance, the bad dubious and the good. Can i haz only the good. I dont want no ying and yang i just want the yang. Well at least in exam its black and white like this but in real life…i just wanna get me acca and move on with my life please lord low and behold. okay i need to sleep. Quick question: how did you personally get so good with acca from and engineering background? i suppose its latent. The tendency of engineering to switch to finance. Meanwhile me finance into design and into finance again. Right back to sleeping
last quick question:
G profit 2500
Op exp (500)
—————
Op profit 2000
FC – o/d (10)
————–
PBIT 1990
FC – loan (300)
FC – lease (290)
———-
PBTSo in that order long term interest bearing borrowing is after PBIT is that so?
But also generally wouldn’t finance charge overdraft be normally included?
Is it this segmentation only happens because in question it was mentioned that all lease obligations are treated as LT interest bearing borrowings? (but wouldn’t lease obligation in the NCL, logically are LT so not worth anonating that particular line. But then also i know its specifically for ROCE right. Just wondering what other purpose would it service to infer…Also, in the calculation of gearing
preferable choice of formula is (d/ d+e) right?
Why in finding the D of Merlot the deferred tax is 500 when in the statement is 100? b/f 100 deduct with c/f 600 right so this represent the DT for the current year?In what situation should one take the direct face value and consider adjustment?
Can one do a T account for tax (DT) based on all those tax value?if i were to do it…
Cr
– b/f: Tax liability 200
– b/f: deferred tax 100
– tax expense from SOPL 400
– Q: What would this value be called? = 500)
————–
1200Dr
– c/f Tax liability 600
– c/f deferred tax 600
———————
1200Also, when is it right to use d / D+e or D/e for gearing which is one is most preferred and accurate in exam?
@aarina said:
Also, when is it right to use d / D+e or D/e for gearing which is one is most preferred and accurate in exam?Hi,
You can use either, unless the questions specifies the one to use.
Thanks
@aarina said:
last quick question:G profit 2500
Op exp (500)
—————
Op profit 2000
FC – o/d (10)
————–
PBIT 1990
FC – loan (300)
FC – lease (290)
———-
PBTSo in that order long term interest bearing borrowing is after PBIT is that so?
But also generally wouldn’t finance charge overdraft be normally included?
Is it this segmentation only happens because in question it was mentioned that all lease obligations are treated as LT interest bearing borrowings? (but wouldn’t lease obligation in the NCL, logically are LT so not worth anonating that particular line. But then also i know its specifically for ROCE right. Just wondering what other purpose would it service to infer…Also, in the calculation of gearing
preferable choice of formula is (d/ d+e) right?
Why in finding the D of Merlot the deferred tax is 500 when in the statement is 100? b/f 100 deduct with c/f 600 right so this represent the DT for the current year?In what situation should one take the direct face value and consider adjustment?
Can one do a T account for tax (DT) based on all those tax value?if i were to do it…
Cr
– b/f: Tax liability 200
– b/f: deferred tax 100
– tax expense from SOPL 400
– Q: What would this value be called? = 500)
————–
1200Dr
– c/f Tax liability 600
– c/f deferred tax 600
———————
1200Hi,
I’m not too sure what you’re trying to do with the tax, as if you’re looking at gearing then the tax is not relevant.
On the first point, then interest on overdraft would be in the finance costs but if there isn’t any in the question then you do not need to worry about it.
Thanks
- The topic ‘Victular’ is closed to new replies.