FIN623 - Taxation Management GDB Solution

by Nilofer Bugti Fri Apr 22, 2011 5:54 pm

FIN623 - Taxation Management GDB Solution

Q1 is exchange risk cover fee in relation to a debt included in the definition of ‘profit on debt’?

Q2 ABC company has recently concluded its loan agreement with a banking company. One of the conditions of the agreement stipulates that the company shall pay the bank a commitment fee to the bank be considered as ‘profit on debt’, as this amount relates to that portion of debt which has not yet been utilized by the company?

by Nilofer Bugti Fri Apr 22, 2011 5:56 pm

Solution….
Q1. Ans.

If the amount of exchange cover fee is adjustable against the profit on debt in future then it is part of debt, other wise it is not part of the debts.

Q2. Ans.

Since the commitment fee is an expanse and if it is adjustable against the debt then it is portion of that. If it is not adjustable then it is not.

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FIN623 - Taxation Management GDB Solution

FIN623 - Taxation Management GDB Solution

Re: FIN623 - Taxation Management GDB Solution