Trapped cash: Difference between revisions
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imported>Doug Williamson (Create the page. Source: MCT reading 2 - 2.3.1, page 14.) |
imported>Doug Williamson (Link with Subsidiary page.) |
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Depreciation of fixed assets reduces the distributable profit, thereby increasing trapped cash balances, especially acute in project companies with a finite life. | Depreciation of fixed assets reduces the distributable profit, thereby increasing trapped cash balances, especially acute in project companies with a finite life. | ||
Bank cover ratios and tax laws which prohibit full distribution have a similar effect. | Bank cover ratios and tax laws which prohibit full distribution have a similar cash-trapping effect. | ||
== See also == | == See also == | ||
*[[Subsidiary]] | |||
*[[Joint venture]] | *[[Joint venture]] | ||
*[[Exchange controls]] | *[[Exchange controls]] | ||
Revision as of 14:19, 21 May 2015
Cash to which access is limited, particularly in the case of non-domestic subsidiaries and joint ventures.
Cash can be trapped by exchange controls, tax, accounting, legal and lender restrictions.
Depreciation of fixed assets reduces the distributable profit, thereby increasing trapped cash balances, especially acute in project companies with a finite life.
Bank cover ratios and tax laws which prohibit full distribution have a similar cash-trapping effect.
