Solvency AHPP Error?!

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Pierre Antounian

December 02, 2019 04:35

Solvency: Total Current Assets /Total Current Liabilities Simple enough right? On the sample Balance Sheet provided a few pages later They use the number used in the Total Assets vs just the current number. So in the example they are including “fixed” assets. So now I’m co fused, is the verbage correct or the actual number? In short, when determining Solvency, do you use the “current” and “fixed” combined or just “current”? Thank you all!

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  Pierre Antounian December 02, 2019 04:44

  I may have overlooked the actual number because the definition example and chart example, the numbers don’t match. So it gives me more confidence that the definition is correct.
  But to confirm: Solvency does NOT include fixed assets correct? Only Current assets.

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  Hongxi Yang December 05, 2019 02:34

  Yes current assets. Do you mean the numbers used in solvency and liquidity calculations on page 418 do not match with table 7.3 on page 427? If so, I guess AHPP has made several typos: 521,667 should be 321,667, 518,194 should be 318,914, 949,451 should be 249,451.... However, AHPP never claimed that these formula examples were based on the table on page 427, so....

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  Pierre Antounian December 05, 2019 03:25

  Hi Hongxi,
  Yes, correct. The numbers in the formulas don’t match the sample statements. I just checked your numbers and came up with the exact same numbers.
  So long as we know what these formulas are and where to look on the statement, we are good! Thank you for checking also.

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  Cody Zimmerman February 24, 2021 20:01

  When using the Wiley guide for the AHPP, does the "All" under content suggest you read the entire chapter or all of the listed page? 

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