Hi guys,
Could you please help explain why the answer of the following question is “B” as I could not find relevant paragraph describing the return calculation on capital expenditure, non recoverable expenses and sales proceeds from notes. And what does it mean for “Non-recoverable expenses”? Thanks.
"The calculation of capital return under the GIPS provisions for real estate is performed by dividing a measure of return by capital employed. Beginning with the change in value of the real estate (and cash), how would the calculation of return account for capital expenditures, nonrecoverable expenses, and sales proceeds?
Capital Expenditures Nonrecoverable Expenses Sales Proceeds
A) Add No adjustment Subtract
B) Subtract No adjustment Add
C) Subtract Subtract Add"