FRS 139 对公司财报的影响

According FRS 139, investment in shares can be classified as either:

1. Held for trading securities (“HFT”); or
2. Available for sale financial assets (“AFS”).

Investments HFT are acquired principally for the purposes of selling in the near term or to take advantage of fluctuation in price. They are short term investments in shares / bonds.

If the share investment is not HFT, then it is AFS. Example of AFS investments is long term investments in shares.

Why is it important to determine the classification of the investments?

Both HFT and AFS investments are measured at fair value (or current market value).

But if it is HFT, the changes in market value will be recognised in P&L;

whereas for AFS investments, the changes in market value will NOT be recognised in P&L, it goes to Equity in Balance Sheet.

See, this is the difference – one impacts P&L and the other will not; but both will have the same impact on the Net Assets.

FRS140 对公司财报的影响

以下取自 Hunza properties berhad 2010-3Q 季报。

The amendment that has material impact is FRS 140, Investment Property.
Following the amendments to FRS 140,
the property under construction or development for future use as investment property is now accounted for as “investment property”,
as compared to “property, plant and equipment, construction-in-progress”, previously.

See Notes A10 and A11.

A10. Valuations of Property, Plant & Equipment
The value of land and buildings, stated at 2010 valuation, has been brought forward after a revaluation exercise carried out on 21 May 2010 by an independent firm of professional valuers using “open market value with existing use” basis. This was in line with our policy that freehold office units and apartments and buildings (held for own use) stated at valuation are revalued at regular intervals of at least once in every five years.

Upon adoption of “Improvements to FRS 140, Investment Property”, the property under construction or development for future use as investment property is now accounted for as Investment Property (refer A2). Hence, Gurney Paragon mall and office, which are under construction and another piece of land were transferred from previous classification of Property, Plant & Equipment to Investment Property during the current period.


A11. Valuations of Investment Properties
The value of such lands are based upon a valuation exercise carried out on 20 January 2010 and 21 May 2010 by independent firms of professional valuers and/or directors. The valuations were arrived at by reference to market evidence of transaction prices for similar properties. This was in line with our policy upon adoption of FRS 140, that investment properties are revalued at regular intervals of at least once every year. Gain on revaluation of the lands that were transferred out from Property, Plant & Equipment (refer A10 above) amounting to RM22.7 million was recognised in current period.