CapGains/Losses in the Formulas
The questions given are usually cap gains and it's a positive number, if we were given a negative number, i.e., cap losses, we would be eventually adding this amount right?
So U/W Inc - CapGains => U/W Inc - (Cap Losses(-)) => U/W Inc + |Cap Losses| ?
Comments
Just to make sure I understand exactly what you're asking, which exam problem(s) are you referring to?
@graham , thanks for your reply! I'm not referring to any exam problem, but just wondering if it's ever possible to have a capital loss and if so how we should treat it in the formula
yes it would be possible. Any time you sell an asset for less than the purchase price, that is a capital loss