All operations between two institutional units and relating to financial assets and liabilities. Certain operations are purely financial: loans, issue or disposal of securities. Here some question & answer of curriculum Operation Level: F1-Financial Operations.

Question: Discuss the role of the appropriate tax policy in the economic development of Bangladesh. 

Answer: Tax is a contribution extracted by the state. It is a non-penal but compulsory and unrequited transfer of resources from the private to the public sector, levied on the basis of predetermined criteria; For economic development of Bangladesh, Tax can be used as an important tool in the following manner:

1. Optimum allocation of available resources.
2. Raising government revenue.
3. Encouraging savings and investment.
4. Reduction of inequalities in income and wealth.
5. Acceleration of Economic growth.
6. Price Stability
7. Control Mechanism.

Thus it can be said that the economic development of Bangladesh depends various reasons, one of them are on the presence of an effective and efficient taxation policy.

Question: Explain the difference between “Free Cash Flow” and “Cash Flow from Operating activities” 

Answer:  Free cash flow is the cash that a company generates from its normal business operations after subtracting any money spent on capital expenditures. Capital expenditures or CAPEX for short;  are purchases of long-term fixed assets, such as property, plant, and equipment.

On the other hand, operating cash flow is the cash that’s generated from normal business operations or activities;  Operating cash flow shows whether a company generates enough positive cash flow to run its business and grow its operations. Here important features are:-

Operating Cash Flow:

1. Operating cash flow measures cash generated by a company’s business operations.
2. The cash flow which is Operating cash flow tells investors whether a company has enough cash flow to pay their bills.

Free Cash Flow:

1. The cash flow which is Free cash flow is the cash that a company generates from its business operations after subtracting capital expenditures.
2. Free cash flow tells investors and creditors that there’s enough cash remaining to pay back creditors, pay dividends, and buyback shares.

Question:Define the “Impairment of Assets” as per IAS 36, and “Non-Current Assets held for sales” Under IFRS 5.

Answer: The aim of IAS 36, Impairment of Assets, is to ensure that assets are carried at no more than their recoverable amount. If an assets carrying value exceeds the amount that could be received through use or selling the asset, then the asset is impaired and the standard requires a company to make provision for the impairment loss. An impairment loss is the amount by which the carrying amount of an asset or cash-generating unit (CGU) exceeds its recoverable amount. The recoverable amount of an asset or a Under IFRS 5, classification of an Asset as held for Sale depend on the following factors:

a)  Management has decided or committed to selling the asset;

b) The asset is available for sale in current situation;

c) There is an active program or campaign to find out the buyer

d) The sale is highly probable an expected to take place within 12 months

e) The marketing of the asset started and the sale price of the asset is reasonable.

f) There are no chances of withdrawing the plan to sell the asset to the management.