could you please assist me on how to calculate (c) and (d) in terms of IAS36

(c) 13 (d) Calculate the carrying amount of each item in the passenger cash-generating unit after this cash-generating unit was tested for impairment on 31 December 2020. Disclose the note for key sources of estimation uncertainty relating to the passenger cash generating unit in the financial statements of Fly-with-me Ltd for the year ended 31 December 2020. Communication skills: presentation 1 IGNORE VALUE ADDED TAXATION You are a financial advisor to Fly-with-me Ltd (FWM), an aviation company based in Johannesburg. The company is listed on the Johannesburg Stock Exchange and has 31 December financial year end. FWM commenced its air transport business with the acquisition of the low-cost passenger- and cargo business from Fly-forever Ltd. At that time the business was soaring and FWM recognised goodwill amounting to R8 000 000 at acquisition of the business, which constituted a business in terms of IFRS 3 Business Combinations The low-cost passenger business and the cargo business are separate cash-generating units (CGU's) The acquisition included the purchase of land and three hangars (aeroplane storage buildings) which could not be allocated to any of the CGU's individually. The annual test for impairment for the cash-generating units, to which goodwill has been allocated are performed on 31 December of each year. On 31 December 2020 the following draft figures were made available to you: Low-cost Passenger Cargo CGU Total CGU R R Land 5 000 000 Hangars 12 000 000 Goodwill 4 000 000 4 000 000 8 000 000 R Airfield runway utilisation 30% 70% 100% 89 000 000 215 250 000 304 250 000 Other assets/(liabilities) Aeroplanes (including payments for new aeroplane (refer note 2.1)) (excluding FWM-A1 (refer note 2.2)) Inventories Bank (net balance) Trade receivables Deferred taxation 1 800 000 1 422 360 1 500 000 2 974 966 2 150 000 8 538 940 8 835 000 (11 553 694) 3 950 000 9 961 300 10 335 000 (8 578 728) You may assume that the above amounts were correctly calculated, before the following was taken into account: 1. AIRFIELD RUNWAY The airport will be relocated in the nearby future to ensure the safety of the residential development around the airpori. On 1 January 2020 the airport management indicated that all airliners operating from the airport, will be liable for the rehabilitation of the land on which the airfield runway was erected, based on the usage thereof. At this date it was anticipated that the airport will be relocated within 10 years. Fly- with-me correctly determined the value of its obligation (with regard to the rehabilitation of the environment) on 1 January 2020 at R650 000 In order to afford such rehabilitation, all participating airliners have to contribute to the RE-Fund. The RE-Fund is administered by independent furd managers and none of the airliners contributing to this fund has control, joint control, or significant influence over the RE-Fund. Fly-with-me has a 10% share in the RE-Fund and contributed R700 000 in total in cash to the RE-Fund on 1 January 2020. No other contributions were made to the fund during the financial year ended 31 December 2020. The RE-Fund invests all contributions paid to the fund and will return these funds with a return on investment at the end of the useful life of the airport, which should mostly cover the expenses required to rehabilitate the airfield runway to its original condition The RE-Fund performed well during the financial year ended 31 December 2020 and the fair value of the net assets of the fund, amounted to R7 230 000 on 31 December 2020. A directive obtained from the South African Revenue Services (SARS) indicated that the investment in this fund is regarded to be of a capital nature. Rehabilitation cost will be allowed as tax deduction when incurred (paid). If FWM obtained a loan from a financial institution to settle the abovementioned obligation, the financial institution would offer a rate of 8% per annum 2. PASSENGER CGU The financial year ended 31 December 2020 was globally a challenging year with the COVID-19 virus spreading disorder, especially in the aviation industry. FWMS passenger business was flying at an all- time low. Fortunately, the transport of medical supplies were lifesaving to FWM, and its cargo business was able to pull the company through the difficult time. 2.1 New aeroplane It takes a substantial time (few months) to complete the construction of a new aeroplane framework. However, due to the demand for aeroplanes, it can take almost three years from the time an order for a new aeroplane framework has been placed, until it is delivered. Replacement aeroplanes are therefore ordered several years in advance of delivery. A significant deposit is payable with the placement of such an order. Once a customer is 20 in the order-line queue, the construction of the aeroplane commences and progress payments are required. As construction of the aeroplane continues, the customer will remain moving upwards in the order-line queue, to be first in the queue when the aeroplane is ready for delivery The transaction is denominated in United States dollar (USD). The aeroplane framework usually amounts to USD2 000 000. The aeroplane engine, however, can cost up to USD12 000 000. It is therefore common practice for airliners to finance aeroplane acquisitions Being in the order-line queue also grants the entity the option to sell its position in the order-line queue. The selling price is mostly determined by the position in the order-line queue. not necessarily due to the payments which has already been made, but due the availability of an aeroplane. FWM obtained a loan from its bank to fund the acquisition of the new aeroplane framework. The deposit (R5 000 000). progress payments and other expenses amounting to R24 550 000 in total were correctly capitalised to property, plant and equipment (aeroplanes) up until 31 December 2020. The new aeroplane will be available for delivery on 31 December 2020. After FWM has inspected the new aeroplane framework, a final payment of USD 500 000 will be payable before FWM may take delivery of the new aeroplane framework. TURN OVER] 2.2 Aeroplane FWM-A1 The new aeroplane (refer 2.1) will be acquired to replace FWM's oldest aeroplane, referred to as FWM- A1. The useful lives of existing aeroplane fleets are increasingly impacted by new technologically advanced aeroplanes with reduced operating costs. FWM, therefore, uses a replacement model where older aeroplanes are replaced when it has reached an age of 10 years. Since these aeroplanes have a 20-year economic life, they are sold in a secondary market at market value. 2.2.1 FWM-A1 framework FMW accounts for the framework of its aeroplanes according to the cost model in terms of IAS 16 Property. Plant and Equipment. Depreciation is accounted for on the straight-line method over the useful life of the assets, after consideration of any residual value. The FWM-A1 aeroplane framework was acquired on 14 December 2011 but was only available for use once the leased engine (refer 2.2.2) was installed on 1 January 2012. FWM-A1 has a useful life of 10 years. On 31 December 2019, R952 585 of the total impairment of Aeroplane FWM A1 (refer 2.2.3) amounting to R1 535 000, was allocated to the framework of FWM-A1 where after the carrying amount of the framework amounted to R16 041 415. On 31 December 2019 the residual value of the framework was re-estimated at R11 500 000, which was the only change in residual value since its original estimation If no impairment had been performed, the carrying amount of the framework would have amounted to R14 247 000 on 31 December 2020. 2.2.2 FWM-A1 aeroplane engine Due to the cost of aeroplane engines, Fly-with-me leased the aeroplane engine of FWM-A1 from Thrust Ltd (Thrust), a company specialising in the lease of aeroplane engines. The company has a South African based subsidiary and all leasing transactions are denominated in South African rand. (You may assume that FWM purchased the aeroplane engines of all of its other aeroplanes). The contract contains a lease as defined in terms of IFRS16 Leases. The right-of-use asset for the leased aeroplane engine is accounted for on the cost model in terms of IAS 16 and presented in a separate line-item in the statement of financial position. The 10-year lease contract commenced on 1 January 2012 with monthly fixed lease instalments amounting to R550 000 each, payable in arrears. A deposit amounting to R800 000 was paid on 1 December 2011 At the end of the lease period FWM-A1 has the option to renew the lease contract for another five years. With FWM's current aeroplane replacement model, FWM indicated at inception of the lease that the company does not intend to exercise the option to extend the lease period for another five years. FWM does however, reassess the lease period on an ongoing basis, particularly when the option to extend becomes exercisable. On 15 December 2011 FWM incurred legal fees amounting to R512 325 to finalise the lease contract. Thrust installed the aeroplane engine (at a cost of R105000) free of charge to FWM on 28 December 2011. The lease contract requires the lessee to guarantee that the aeroplane engine will be returned at a specified value. The lease contract contains the following two options in which this value can be determined (a) an amount based on the expected market value of the aeroplane engine at the end of the lease period; or (b) a value determined by the remaining distance which the aeroplane engine will be able to travel at the end of the lease period. The lease contract therefore specifies the maximum distance (mileage) which may be travelled during the lease period. At the end of the lease period, the lessee will pay a penalty for each additional mile, in excess of the maximum mileage specified in the lease contract, which the leased engine has travelled. Based on its projected travel schedules, FWM-At will not exceed the maximum mileage specified in the lease contract for the duration of the lease period. However, FWM still decided to select option (a). On 1 January 2012 the market value of the aeroplane engine at the end of the 10-year lease period was estimated at R60 000 000 and FWM estimated that no amount will be payable at the end of the lease period, with regard to this residual value guarantee Thrust informed FWM of all the details pertaining to the lease. FWM was thus also aware that the fair value of the aeroplane engine amounted to R79 710 412 at the inception of the lease. On 1 January 2012 FWM's incremental borrowing rate was 6,75% 2.2.3 Aeroplane FWM-A1 (framework including aeroplane engine) Aeroplane FWM-A1 (framework including the aeroplane engine and its related liabilities) is a cash. generating unit, since the framework on its own, can't generate any cash inflows. On 31 December 2019 Aeroplane FWM-A1 was impaired with R1 535 000 (also refer to 2.2.1). This was the only impairment on Aeroplane FWM-A1 On 31 December 2020, due to the decline in passenger air travel, the fair value of Aeroplane FWM-A1 declined to R10 900 000 and brokers were forced to lower their selling charges to 0,8% of the selling price of the aeroplane Due to uncertainty of what the future may hold the financial director of FWM is reluctant to continue with the acquisition of the new aeroplane. The company also does not consider the disposal of its current position in the order-line queue (which is the immediate availability of an aeroplane) due to its poor market value on 31 December 2020. FWM also has the option to relinquish (give away) its current position in the order-line and to move to the last position in the order-line queue. All payments up to date will remain with the aeroplane manufacturer which FWM may utilise against future aeroplane acquisitions only. On 20 December 2020 the financial director approached you to assist the company with the information required to make an informed decision. Should FWM decide not to continue with the acquisition of the new aeroplane, the company will continue to utilise Aeroplane FWM-A1 for another five years at the following estimated cash flows: Actual Estimated Estimated Estimated Estimated Estimated 2020 2021 2022 2023 2024 2025 3 225 000 3 450 200 3 657 000 3 839 850 4 109 000 3 200 000 Cash inflows Cash outflows (2 050 000) (2 092 500) 2 137 750) (2 185 000) (2 215 000) (2 265 000) 1 162 500 1 312 450 1 472 000 1 624 850 1 844 000 Net cash inflows 1 150 000 You may assume that all cash flow are incurred at the end of each financial year. (TURN OVER] PAPER 2 You may assume that the above-mentioned amounts were calculated correctly. The above cash flow forecast excludes any taxation but has been adjusted for inflation. Cash outflows includes depreciation at a fixed amount of R1 200 000 per annum, however, finance charges and lease payments (refer 2.3) have not been taken into account yet. The following annual after-tax discount rates are appropriate to similar cash-generating units: Nominal rate 7,2% Real rate 5,76% FWM expects to sell the framework of FWM-A1 at the end of 31 December 2025 at an estimated amount of R6 500 000 2.3 Passenger cash-generating unit On 31 December 2020 management determined that the recoverable amount of the passenger CGU amounted at R102 949 645. In order to obtain this recoverable amount, management depended to a significant extent on unobservable valuation inputs to measure the fair value of the CGU. Cash flows were based on the approved budget forecast. Management referred to the 2020 "Aviation Outlook" report as default basis to determine the expected growth rate for the passenger CGU and selected a rate appropriate to passenger travel. Judgemental changes were applied to the rate to reflect circumstances specific to the FWM's CGU, which is mainly focussed on tourism travel. Medium to short term growth rates of between 5% -7% were applied to five-year cash flows. Management lowered the growth rate assumptions from the previous financial year due to the global impact of COVID-19. This rate is also lower than the anticipated growth rate for the cargo CGU which is performing better within the current circumstances. The net realisable value of inventory was determined at R1 280 000. On 31 December 2020 neither the movement in lifetime expected credit losses, amounting to R125 000, nor the movement in 12-month expected credit losses, amounting to R190 000, was taken into account yet. However, management indicated that trade receivables do not contain a significant finance component You may assume that FWM decided on 31 December 2020 not to continue with the acquisition of the new aeroplane framework, but to utilise Aeroplane FWM-A1 for another five years. All payments already made to the manufacturer will be retained by the manufacturer to be utilised against future aircraft acquisitions only Additional information You may assume that all amounts are material. You may assume that the normal income tax rate is 28% and that capital gains are included at 80%. (c) 13 (d) Calculate the carrying amount of each item in the passenger cash-generating unit after this cash-generating unit was tested for impairment on 31 December 2020. Disclose the note for key sources of estimation uncertainty relating to the passenger cash generating unit in the financial statements of Fly-with-me Ltd for the year ended 31 December 2020. Communication skills: presentation 1 IGNORE VALUE ADDED TAXATION You are a financial advisor to Fly-with-me Ltd (FWM), an aviation company based in Johannesburg. The company is listed on the Johannesburg Stock Exchange and has 31 December financial year end. FWM commenced its air transport business with the acquisition of the low-cost passenger- and cargo business from Fly-forever Ltd. At that time the business was soaring and FWM recognised goodwill amounting to R8 000 000 at acquisition of the business, which constituted a business in terms of IFRS 3 Business Combinations The low-cost passenger business and the cargo business are separate cash-generating units (CGU's) The acquisition included the purchase of land and three hangars (aeroplane storage buildings) which could not be allocated to any of the CGU's individually. The annual test for impairment for the cash-generating units, to which goodwill has been allocated are performed on 31 December of each year. On 31 December 2020 the following draft figures were made available to you: Low-cost Passenger Cargo CGU Total CGU R R Land 5 000 000 Hangars 12 000 000 Goodwill 4 000 000 4 000 000 8 000 000 R Airfield runway utilisation 30% 70% 100% 89 000 000 215 250 000 304 250 000 Other assets/(liabilities) Aeroplanes (including payments for new aeroplane (refer note 2.1)) (excluding FWM-A1 (refer note 2.2)) Inventories Bank (net balance) Trade receivables Deferred taxation 1 800 000 1 422 360 1 500 000 2 974 966 2 150 000 8 538 940 8 835 000 (11 553 694) 3 950 000 9 961 300 10 335 000 (8 578 728) You may assume that the above amounts were correctly calculated, before the following was taken into account: 1. AIRFIELD RUNWAY The airport will be relocated in the nearby future to ensure the safety of the residential development around the airpori. On 1 January 2020 the airport management indicated that all airliners operating from the airport, will be liable for the rehabilitation of the land on which the airfield runway was erected, based on the usage thereof. At this date it was anticipated that the airport will be relocated within 10 years. Fly- with-me correctly determined the value of its obligation (with regard to the rehabilitation of the environment) on 1 January 2020 at R650 000 In order to afford such rehabilitation, all participating airliners have to contribute to the RE-Fund. The RE-Fund is administered by independent furd managers and none of the airliners contributing to this fund has control, joint control, or significant influence over the RE-Fund. Fly-with-me has a 10% share in the RE-Fund and contributed R700 000 in total in cash to the RE-Fund on 1 January 2020. No other contributions were made to the fund during the financial year ended 31 December 2020. The RE-Fund invests all contributions paid to the fund and will return these funds with a return on investment at the end of the useful life of the airport, which should mostly cover the expenses required to rehabilitate the airfield runway to its original condition The RE-Fund performed well during the financial year ended 31 December 2020 and the fair value of the net assets of the fund, amounted to R7 230 000 on 31 December 2020. A directive obtained from the South African Revenue Services (SARS) indicated that the investment in this fund is regarded to be of a capital nature. Rehabilitation cost will be allowed as tax deduction when incurred (paid). If FWM obtained a loan from a financial institution to settle the abovementioned obligation, the financial institution would offer a rate of 8% per annum 2. PASSENGER CGU The financial year ended 31 December 2020 was globally a challenging year with the COVID-19 virus spreading disorder, especially in the aviation industry. FWMS passenger business was flying at an all- time low. Fortunately, the transport of medical supplies were lifesaving to FWM, and its cargo business was able to pull the company through the difficult time. 2.1 New aeroplane It takes a substantial time (few months) to complete the construction of a new aeroplane framework. However, due to the demand for aeroplanes, it can take almost three years from the time an order for a new aeroplane framework has been placed, until it is delivered. Replacement aeroplanes are therefore ordered several years in advance of delivery. A significant deposit is payable with the placement of such an order. Once a customer is 20 in the order-line queue, the construction of the aeroplane commences and progress payments are required. As construction of the aeroplane continues, the customer will remain moving upwards in the order-line queue, to be first in the queue when the aeroplane is ready for delivery The transaction is denominated in United States dollar (USD). The aeroplane framework usually amounts to USD2 000 000. The aeroplane engine, however, can cost up to USD12 000 000. It is therefore common practice for airliners to finance aeroplane acquisitions Being in the order-line queue also grants the entity the option to sell its position in the order-line queue. The selling price is mostly determined by the position in the order-line queue. not necessarily due to the payments which has already been made, but due the availability of an aeroplane. FWM obtained a loan from its bank to fund the acquisition of the new aeroplane framework. The deposit (R5 000 000). progress payments and other expenses amounting to R24 550 000 in total were correctly capitalised to property, plant and equipment (aeroplanes) up until 31 December 2020. The new aeroplane will be available for delivery on 31 December 2020. After FWM has inspected the new aeroplane framework, a final payment of USD 500 000 will be payable before FWM may take delivery of the new aeroplane framework. TURN OVER] 2.2 Aeroplane FWM-A1 The new aeroplane (refer 2.1) will be acquired to replace FWM's oldest aeroplane, referred to as FWM- A1. The useful lives of existing aeroplane fleets are increasingly impacted by new technologically advanced aeroplanes with reduced operating costs. FWM, therefore, uses a replacement model where older aeroplanes are replaced when it has reached an age of 10 years. Since these aeroplanes have a 20-year economic life, they are sold in a secondary market at market value. 2.2.1 FWM-A1 framework FMW accounts for the framework of its aeroplanes according to the cost model in terms of IAS 16 Property. Plant and Equipment. Depreciation is accounted for on the straight-line method over the useful life of the assets, after consideration of any residual value. The FWM-A1 aeroplane framework was acquired on 14 December 2011 but was only available for use once the leased engine (refer 2.2.2) was installed on 1 January 2012. FWM-A1 has a useful life of 10 years. On 31 December 2019, R952 585 of the total impairment of Aeroplane FWM A1 (refer 2.2.3) amounting to R1 535 000, was allocated to the framework of FWM-A1 where after the carrying amount of the framework amounted to R16 041 415. On 31 December 2019 the residual value of the framework was re-estimated at R11 500 000, which was the only change in residual value since its original estimation If no impairment had been performed, the carrying amount of the framework would have amounted to R14 247 000 on 31 December 2020. 2.2.2 FWM-A1 aeroplane engine Due to the cost of aeroplane engines, Fly-with-me leased the aeroplane engine of FWM-A1 from Thrust Ltd (Thrust), a company specialising in the lease of aeroplane engines. The company has a South African based subsidiary and all leasing transactions are denominated in South African rand. (You may assume that FWM purchased the aeroplane engines of all of its other aeroplanes). The contract contains a lease as defined in terms of IFRS16 Leases. The right-of-use asset for the leased aeroplane engine is accounted for on the cost model in terms of IAS 16 and presented in a separate line-item in the statement of financial position. The 10-year lease contract commenced on 1 January 2012 with monthly fixed lease instalments amounting to R550 000 each, payable in arrears. A deposit amounting to R800 000 was paid on 1 December 2011 At the end of the lease period FWM-A1 has the option to renew the lease contract for another five years. With FWM's current aeroplane replacement model, FWM indicated at inception of the lease that the company does not intend to exercise the option to extend the lease period for another five years. FWM does however, reassess the lease period on an ongoing basis, particularly when the option to extend becomes exercisable. On 15 December 2011 FWM incurred legal fees amounting to R512 325 to finalise the lease contract. Thrust installed the aeroplane engine (at a cost of R105000) free of charge to FWM on 28 December 2011. The lease contract requires the lessee to guarantee that the aeroplane engine will be returned at a specified value. The lease contract contains the following two options in which this value can be determined (a) an amount based on the expected market value of the aeroplane engine at the end of the lease period; or (b) a value determined by the remaining distance which the aeroplane engine will be able to travel at the end of the lease period. The lease contract therefore specifies the maximum distance (mileage) which may be travelled during the lease period. At the end of the lease period, the lessee will pay a penalty for each additional mile, in excess of the maximum mileage specified in the lease contract, which the leased engine has travelled. Based on its projected travel schedules, FWM-At will not exceed the maximum mileage specified in the lease contract for the duration of the lease period. However, FWM still decided to select option (a). On 1 January 2012 the market value of the aeroplane engine at the end of the 10-year lease period was estimated at R60 000 000 and FWM estimated that no amount will be payable at the end of the lease period, with regard to this residual value guarantee Thrust informed FWM of all the details pertaining to the lease. FWM was thus also aware that the fair value of the aeroplane engine amounted to R79 710 412 at the inception of the lease. On 1 January 2012 FWM's incremental borrowing rate was 6,75% 2.2.3 Aeroplane FWM-A1 (framework including aeroplane engine) Aeroplane FWM-A1 (framework including the aeroplane engine and its related liabilities) is a cash. generating unit, since the framework on its own, can't generate any cash inflows. On 31 December 2019 Aeroplane FWM-A1 was impaired with R1 535 000 (also refer to 2.2.1). This was the only impairment on Aeroplane FWM-A1 On 31 December 2020, due to the decline in passenger air travel, the fair value of Aeroplane FWM-A1 declined to R10 900 000 and brokers were forced to lower their selling charges to 0,8% of the selling price of the aeroplane Due to uncertainty of what the future may hold the financial director of FWM is reluctant to continue with the acquisition of the new aeroplane. The company also does not consider the disposal of its current position in the order-line queue (which is the immediate availability of an aeroplane) due to its poor market value on 31 December 2020. FWM also has the option to relinquish (give away) its current position in the order-line and to move to the last position in the order-line queue. All payments up to date will remain with the aeroplane manufacturer which FWM may utilise against future aeroplane acquisitions only. On 20 December 2020 the financial director approached you to assist the company with the information required to make an informed decision. Should FWM decide not to continue with the acquisition of the new aeroplane, the company will continue to utilise Aeroplane FWM-A1 for another five years at the following estimated cash flows: Actual Estimated Estimated Estimated Estimated Estimated 2020 2021 2022 2023 2024 2025 3 225 000 3 450 200 3 657 000 3 839 850 4 109 000 3 200 000 Cash inflows Cash outflows (2 050 000) (2 092 500) 2 137 750) (2 185 000) (2 215 000) (2 265 000) 1 162 500 1 312 450 1 472 000 1 624 850 1 844 000 Net cash inflows 1 150 000 You may assume that all cash flow are incurred at the end of each financial year. (TURN OVER] PAPER 2 You may assume that the above-mentioned amounts were calculated correctly. The above cash flow forecast excludes any taxation but has been adjusted for inflation. Cash outflows includes depreciation at a fixed amount of R1 200 000 per annum, however, finance charges and lease payments (refer 2.3) have not been taken into account yet. The following annual after-tax discount rates are appropriate to similar cash-generating units: Nominal rate 7,2% Real rate 5,76% FWM expects to sell the framework of FWM-A1 at the end of 31 December 2025 at an estimated amount of R6 500 000 2.3 Passenger cash-generating unit On 31 December 2020 management determined that the recoverable amount of the passenger CGU amounted at R102 949 645. In order to obtain this recoverable amount, management depended to a significant extent on unobservable valuation inputs to measure the fair value of the CGU. Cash flows were based on the approved budget forecast. Management referred to the 2020 "Aviation Outlook" report as default basis to determine the expected growth rate for the passenger CGU and selected a rate appropriate to passenger travel. Judgemental changes were applied to the rate to reflect circumstances specific to the FWM's CGU, which is mainly focussed on tourism travel. Medium to short term growth rates of between 5% -7% were applied to five-year cash flows. Management lowered the growth rate assumptions from the previous financial year due to the global impact of COVID-19. This rate is also lower than the anticipated growth rate for the cargo CGU which is performing better within the current circumstances. The net realisable value of inventory was determined at R1 280 000. On 31 December 2020 neither the movement in lifetime expected credit losses, amounting to R125 000, nor the movement in 12-month expected credit losses, amounting to R190 000, was taken into account yet. However, management indicated that trade receivables do not contain a significant finance component You may assume that FWM decided on 31 December 2020 not to continue with the acquisition of the new aeroplane framework, but to utilise Aeroplane FWM-A1 for another five years. All payments already made to the manufacturer will be retained by the manufacturer to be utilised against future aircraft acquisitions only Additional information You may assume that all amounts are material. You may assume that the normal income tax rate is 28% and that capital gains are included at 80%