Nice video, in order to make it a clear it would be a good idea to calculate the tax separately and transfer the tax amount into the cash flow (at least this how I did it). Someone (like me) might (...or definitely) forget to add back the capital allowances. Nice video
I do make this point in the next video in the series (and also that the current examiner does not usually add back the capital allowances anyway for reasons that I do explain).
Hi, For calculating the capital allowance. What the lecturers did was, 1.8m*25% = 450k. I am wondering why the scrap value hasn't been taken into account? ------ (cost-scrap value) * reducing balance rate = (1.8m-1m)*25% = 200k????
If you wish for our tutor to answer then please ask in the free Paper AFM Ask the Tutor Forum on our website. It is because our tutors do not monitor posts here, but they always. answer questions posted in our Ask the Tutor Forums. (and everything on our website is free of charge :-) )
Why can't we assume that the raw materials are bought at a present date to be sold. I mean just like the working capital injection is considered to be done at the start of the year, Arent the raw materials bought at the beginning too ????
Part of the reason for there being working capital is to finance the purchase of the initial inventory and so it effectively includes it. In practice, materials will probably be being purchased throughout the year, but for discounting we always assume that operating flows occur at the ends of years unless specifically told otherwise. The timing of other flows (such as the initial cost and the working capital) depend on the wording of the question but will usually be at the start of the year.
![Wolfram Physics Project: Working Session Wednesday, Apr. 29, 2020 [Finding Black Hole Structures]](/img/n.gif)
John is the best. thank you opentuition for the great material.. you are a God gift to all ACCA students
Nice video, in order to make it a clear it would be a good idea to calculate the tax separately and transfer the tax amount into the cash flow (at least this how I did it). Someone (like me) might (...or definitely) forget to add back the capital allowances. Nice video
I do make this point in the next video in the series (and also that the current examiner does not usually add back the capital allowances anyway for reasons that I do explain).
Hi, For calculating the capital allowance. What the lecturers did was, 1.8m*25% = 450k. I am wondering why the scrap value hasn't been taken into account? ------ (cost-scrap value) * reducing balance rate = (1.8m-1m)*25% = 200k????
That 12,000 deferred tax allowance, shouldn't it be recognized in year 2? Thank you always.
If you wish for our tutor to answer then please ask in the free Paper AFM Ask the Tutor Forum on our website. It is because our tutors do not monitor posts here, but they always. answer questions posted in our Ask the Tutor Forums. (and everything on our website is free of charge :-) )
How about the 20% fixed overheads? Is it not included in the cash flow?
There is no extra cost, hence not relevant for this question
yes, allocated costs, irrelevant
Is there any change fir this video for exm sep2021
No there is not because there is no change to the syllabus.
Why can't we assume that the raw materials are bought at a present date to be sold. I mean just like the working capital injection is considered to be done at the start of the year, Arent the raw materials bought at the beginning too ????
Part of the reason for there being working capital is to finance the purchase of the initial inventory and so it effectively includes it. In practice, materials will probably be being purchased throughout the year, but for discounting we always assume that operating flows occur at the ends of years unless specifically told otherwise. The timing of other flows (such as the initial cost and the working capital) depend on the wording of the question but will usually be at the start of the year.