Scribd Logo
Upload

Welcome to Scribd!

  • FIN623 - Taxation Management GDB Solution

    Uploaded by

    Muhammad azeem
    953 views1 page
    The document discusses two questions regarding taxation management. For the first question, an exchange risk cover fee related to debt is included in the definition of 'profit on debt' if the fee is adjustable against future debt profits, otherwise it is not considered part of the debt. For the second question, a commitment fee paid by a company to a bank can be considered 'profit on debt' if the fee is adjustable against the unused portion of debt, otherwise it is simply an expense.

    Original Description:

    Copyright

    © Attribution Non-Commercial (BY-NC)

    Available Formats

    DOC, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    The document discusses two questions regarding taxation management. For the first question, an exchange risk cover fee related to debt is included in the definition of 'profit on debt' if the fee is adjustable against future debt profits, otherwise it is not considered part of the debt. For the second question, a commitment fee paid by a company to a bank can be considered 'profit on debt' if the fee is adjustable against the unused portion of debt, otherwise it is simply an expense.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    953 views1 page

    FIN623 - Taxation Management GDB Solution

    Uploaded by

    Muhammad azeem
    The document discusses two questions regarding taxation management. For the first question, an exchange risk cover fee related to debt is included in the definition of 'profit on debt' if the fee is adjustable against future debt profits, otherwise it is not considered part of the debt. For the second question, a commitment fee paid by a company to a bank can be considered 'profit on debt' if the fee is adjustable against the unused portion of debt, otherwise it is simply an expense.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 1

    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?

    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.

    You might also like