07-11-2015, 08:31 PM
(07-11-2015, 02:14 PM)Yoyo Wrote: [ -> ]Hi Greenrookiethank you yoyo!
1) for property counters, developmental properties are booked under current assets. Is the value booked at cost of construction or booked at units already sold?
Development properties – Sing Holding AR 2014 Notes to Accounts 2.14
Development properties are properties acquired or being constructed for sale in the ordinary course of business, rather than to be held for the Group’s own use, rental or capital appreciation. Development properties are held as inventories and are measured at the lower of cost and net realisable value. The cost of development properties held for sale includes cost of land and construction, related overhead expenditure and financing charges incurred during the period of construction and up to the completion of construction. Non-refundable commissions paid to sales or marketing agents on the sale of development properties are expensed when incurred. Allowance for foreseeable losses on development properties is made when it is anticipated that the net realisable value has fallen below cost. Net realisable value of development properties is the estimated selling price in the ordinary course of the business, based on market prices at the reporting date and discounted for the time value of money if material, less the estimated costs of completion and the estimated costs necessary to make the sale.
2) cogent mentioned their building of 1 hub logistic is capitalized,what does that mean? It is now an asset?
Capital Expenditure, capex – does not constitutes a charge to P&L when incurred.
Construction costs of 1 Hub Logistic began in Year 2012, is initially taken up to the accounts under Construction in-progress of the Fixed Assets/Property Plant and Equipment (Cogent AR Notes to Accounts #10). Upon completion and commissioned, it is transferred/reclassified to the respective fixed assets categories – Land, Building, Leasehold Improvement, Equipments. Thereafter, depreciation shall commerce with yearly charge to the P&L.(ie operating expenditure – opex)
In another word, these related costs are treated as capital in nature / capex and therefore capitalized since day 1 (back in Year 2012). Cogent mentioned their building of 1 hub logistic is capitalized in Year 2014 basically meant that the facility is completed and ready for use.
3) capex for future investment, where does it appear in the PnL, under cost of sales or ??
Capex is taken up in Balance Sheet and Opex is shown in P&L. Possible sources on the amount of upcoming capex spending for future investment – Press results release, Management briefing to analysts, Annual Reports - Chairman statement and/or Balance Sheet Notes to Accounts 31– Capital commitment.
Hope this helps.
it sure helps. Maybe the context of me asking the questions. I was looking at OXley to determine the health of (or lack of) balance sheet. Was surprise that there current ratio is rather robust due to its high developmental properties ...
If it is cost of construction than that value might be "lower" since the realizable value might not happen? Whatever it is, it seems to be a "projected value" when realizable value is concerned while cost is hardly useful if we think about if the company is strong for the bonds to "survive"
Q 3 puzzle happen when ST CEO says they need to invest even if it affect profits in ghre short term, and I was like "huh? Where capex for future investment will affect Pn L? Not just cash flow meh?"
thanks for your explanation