Concept of Cost of Capital

Simple Definition for you is that:

"Cost is associate with everything e.g (Rent a car in this case rent is that cost of borrowing that car)"
In Business, you know sometime management need funds for investment e.g Assuming that there are two possible way to fund the investment, first is issue the new shares and secondly borrow from the bank.

Share holder & the Bank will not fund you free of cost, they will require some return on that investment.
Let suppose bank gives you $1000 for 5 years means you will have to return the Principle amount which is $1000 plus interest over 5 years, let say bank will ask you interest 10% of $1000 per year. then it will be $500 cost of $1000 of borrowed amount .
Company need to evaluate, if they invest bank money into the project, that project can be beneficial for us after paying the cost of that capital, that we borrowed from bank.

Emphasis of Matter & Other Matter Paragraph

ISA 706 Emphasis of Matter & Other Matter Paragraph
·It is fundamental to users’ understanding of the Financial Statement. ·The matter is adequately disclosed in the financial statement.
Q: How to judge in question whether or not the Matter is Fundamental?
A: If the Matter is Material, then it will fundamental to user’s understanding.
Remember: Total Assets:    1% to 25% Revenue:         0.5% to 15% PBT:                 5% to 25%
Disclosure: Disclosures in the financial statements that the applicable financial reporting framework requires management to make, or that are otherwise necessary to achieve fair presentation.
Remember: The auditor would not be required to modify the opinion in accordance with ISA 705 (Revised) but it ‘modifies the report’
Placement of EOM Para in Report:
·Include it immediately after the Basis of Opinion para in audit report. ·When a Key Audit Matters section is presented in the auditor’s report, an Emphasis of Matter paragraph may be presented either directly befor…

How to use Vlookup

How to use VLOOKUPVLOOKUP looks at a value in one column, and finds its corresponding value on the same row in another column. Vlookup Syntax For vlookup syntax is lookup_value, table_array, col_index_num, [range_lookup] What is Lookup Value? Lookup value means which value do you want to find out whether by selecting a cell or by putting the value inside the formula such as: Below is the example of selection of cell: What is Lookup Value? Below is the example of putting the value inside the formula but remember “text always between the Double quotation mark in any formula” What is Table Array? Table array, you enter a range of cells, such as D2:F20. That range is called the table_array table_arrayWhat is Col index Num? Which column value you want return. Illustration of Vlookup Thank You for reading the article ! if you like more technical articles so share & email at