Hi, On page 20 of Ch 6,its mentioned that XSE may arise due to significant falls in the market value of bonds but not due to significant falls in the market value of equities. Please explain this.I didn't understand how significant fall in market value of bonds may result in a company being XSE and similarly why not for equities. Thanks in advance.
Because (as indicated earlier in that chapter) gains/losses on equity are typically not taxed as part of 'I' until they are realised. A 'fall in the market value of equities' generates an unrealised loss and so would not be included in 'I'.
