Trapped cash: Difference between revisions
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Cash to which access is limited, particularly in the case of non-domestic subsidiaries and joint ventures. | 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 | Cash can be trapped by exchange controls, tax, accounting, legal, lender or other restrictions. | ||
Revision as of 11:59, 18 March 2017
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, lender or other 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.
