1 person likes this.

36 comment(s). Last comment by Neoh Jia En 2022-01-23 19:48

i3lurker

12,172 posts

Posted by i3lurker > 2022-01-21 23:26 | Report Abuse

substance over form and intention

I always find it weird that Directors/major shareholders refused to allow perpetual bond holders to have voting rights that clearly defines a shareholder as a shareholder.
However when it comes to Earnings or payments to "not shareholder" perpetual bondholders, these payments are considered as earnings of "not shareholder, now shareholder" so that the earnings per share is computed as higher.

if this is not double talk of a snake oil salesman, I dun know what is

i3lurker

12,172 posts

Posted by i3lurker > 2022-01-21 23:44 | Report Abuse

You need to strip away all those numberings and scenarios and technical mumbo jumbo
and see the ultimate objective

=> of increasing earnings by using snake oil double talk.

I do believe perpetual bondholders are mere liabilities, the intention was never to give them shareholder status.

of course, the industry businessmen wants high EPS and will object strenously just like the Goodwill/Badwill/illwill scandal in Malaysia.

walking away from defining perpetuals as mere liabilities is just like licensing opium becoz people like opium.

i3lurker

12,172 posts

Posted by i3lurker > 2022-01-22 00:14 | Report Abuse

in the Malaysian Goodwill scandal many years back.

Goodwill in Malaysia was supposed to be "all" written off.
Nobody bothered about it.

No worries, no problem, was ok, can be done. Yes Sir, if you say so.

... until some Captains of Industry found out that their PLC companies might become PN17, wink wink, as a result.

Delegations after delegations after delegations visited the Ministry of Finance
and end result is that the Accounting Bodies were asked to bend over to be publicly caned.

new solution => No need to write off Goodwill.

:)

does it not sound like why Accounting Body after public caning walked away from perpetuals as mere liabilities?

benlim

25 posts

Posted by benlim > 2022-01-22 00:40 | Report Abuse

Something like Preferred Share? Allianz-PA?

Posted by Neoh Jia En > 2022-01-22 07:39 | Report Abuse

@i3lurker ... that's harsh. Unfortunately Yinson's perps may indeed be required to be classified as equity. Have to take any further argument on that issue to IASB instead. @benlim yup, treating perps like preferred shares is what I argued for as well.

Sslee

254 posts

Posted by Sslee > 2022-01-22 08:19 | Report Abuse

Nothing lasts forever/perpetual. Everything will come to an end one day.

i3lurker

12,172 posts

Posted by i3lurker > 2022-01-22 08:24 | Report Abuse

at the end of the day.....

The Accounting Standard is what those Captains of Industry say it is.

Accounting Bodies says "Please tell me what you want and I will make it happen"


Posted by Neoh Jia En > Jan 22, 2022 7:39 AM | Report Abuse

@i3lurker ... that's harsh. Unfortunately Yinson's perps may indeed be required to be classified as equity. Have to take any further argument on that issue to IASB instead. @benlim yup, treating perps like preferred shares is what I argued for as well.

Sslee

254 posts

Posted by Sslee > 2022-01-22 08:36 | Report Abuse

Goodwill is like you are paying RM 5.00 for QL which has NAPS of RM 1.00.

What should we call when you are buying Insas at RM 0.91 which has NAPS of RM 3.23?

i3lurker

12,172 posts

Posted by i3lurker > 2022-01-22 09:01 | Report Abuse

of course

that should be called as Goodbuy aka Goodbye, a value trap



Sslee Goodwill is like you are paying RM 5.00 for QL which has NAPS of RM 1.00.

What should we call when you are buying Insas at RM 0.91 which has NAPS of RM 3.23?
22/01/2022 8:36 AM

Sslee

254 posts

Posted by Sslee > 2022-01-22 09:06 | Report Abuse

FPSO can be anchored at any part of the world unlike oil rigs. The question is when and not if tecnology advance in energy will make crude oil obsolete.

Sslee

254 posts

Posted by Sslee > 2022-01-22 09:08 | Report Abuse

Hahahaha,
I like the Goodbuy aka Goodbye.

i3lurker

12,172 posts

Posted by i3lurker > 2022-01-22 09:10 | Report Abuse

Going back to Kunta Kinte, Roots

earnings per share was originally ONLY meant for Ordinary Shareholders,
telling them how much profits their investment made before issuing dividends.

Once you add a perpetrator like perps into the equation,
the inflated "extra" earnings were NOT banked into the company at all
but were paid out to those perps.

EPS without perps => X sen

EPS with perps => X + Y sen where Y had "gone out" of the company

Earnings per share was originally ONLY meant for Ordinary Shareholders had been grossly distorted by this Snake Oil Scheme.

Sslee

254 posts

Posted by Sslee > 2022-01-22 09:16 | Report Abuse

I3lurker are you saying the preps is nothing but a legal snake oil scam to syphon out the money?

i3lurker

12,172 posts

Posted by i3lurker > 2022-01-22 09:21 | Report Abuse

there is the accounting standard and the "spirit" of the accounting standard.

just like contravention of the "spirit of the takeover code" is also a major contravention.

I dun see how heaping loads of "Gone Earnings" given to perps onto EPS retained earned earnings calculations meant for ordinary shareholders can reflect a "better picture" rather than a Snake Oil picture.

i3lurker

12,172 posts

Posted by i3lurker > 2022-01-22 09:25 | Report Abuse

It is a compulsory Snake Oil scheme.
coz IASB insists that you partake of this Snake Oil scheme whether you like it or not.

Companies like Yinson have No Choice but to follow IASB accounting standards.
Yinson did not choose this treatment.

Yinson is just meekly following orders of IASB.
Non-compliance by Yinson will mean a nasty note by external auditors.



Posted by Sslee > Jan 22, 2022 9:16 AM | Report Abuse

I3lurker are you saying the preps is nothing but a legal snake oil scam to syphon out the money?

Sslee

254 posts

Posted by Sslee > 2022-01-22 09:26 | Report Abuse

Philip Palantir (USD 13.53) and Stoneco (USD 14.46) and even Netflix (USD 397.50) look very interesting now.

calvintaneng

48,917 posts

Posted by calvintaneng > 2022-01-22 09:29 | Report Abuse

Get out of Yinson as this is a company in financial distress

Winning lots of jobs with razor thin profit margin cannot cover borrowings and assets depreciation

Bonus and warrant are camouflage to hide it's Rights issues of Rm1.22 Billions asking shareholders for help

If so good why ask so much Rm1.22 Billions cash by veiled Rights issue from shareholders

A financially distressed company should be avoid at this time

Go for companies like Taann or Bplant or even Innoplant which give out cash rather than ask for cash

Posted by SarifahSelinder > 2022-01-22 16:05 | Report Abuse

taking d perpetual bond as equity nampak lebih betul.. kan dah bilang perpetual??

klau nak adjust EPS... will reduce the earning kat d numerator sama effect nya dgn increase the no of shares kat d denominator??

Posted by SarifahSelinder > 2022-01-22 16:07 | Report Abuse

wonder if tis thingy sebab nya Dialog jatuh sampai 52 w low apabila harga minyak kat multi year high ??

Posted by Neoh Jia En > 2022-01-22 16:27 | Report Abuse

@SarifahSelinder memang saya dah fikir tentang kemungkinan untuk ubah denominator, tetapi unit untuk "perpetual" tak sama dengan unit untuk saham, dan "perpetual" yang saya bincang tak boleh ditukar kepada saham. Dan sebab Dialog jatuh beberapa hari yang lalu, pergi tanya Macquarie. Laporannya memang bagus.

Posted by SarifahSelinder > 2022-01-23 08:47 | Report Abuse

No par value is not helping

Posted by SarifahSelinder > 2022-01-23 08:49 | Report Abuse

Pasti ka auditors report on EPS?

Rasa rasa mcm no

Posted by SarifahSelinder > 2022-01-23 09:02 | Report Abuse

Wil u single handedly mess up Yinson punya ongoing fund raising plan?

Kan Yinson issue a statement to clarify?

Kan Yinson issue a legal letter to u?

Posted by Neoh Jia En > 2022-01-23 09:40 | Report Abuse

@SarifahSelinder auditors memang perlu audit EPS juga kerana ia diikat bawah peraturan IFRS/MFRS. Dan ya, saya akan jumpa mereka hari isnin ni.

Posted by Neoh Jia En > 2022-01-23 09:51 | Report Abuse

@SarifahSelinder IAS 33/MFRS 133 paragraph 3: "An entity that discloses earnings per share shall calculate and disclose earnings per share in accordance with this Standard."

Posted by AlsvinChangan > 2022-01-23 10:12 | Report Abuse

the perpetual bond are long term loan with interests payments BUT can be recalled.


perpetual bond are likely park under non-current liabilities THAN under Equity


DID perpetual bond distorted EPS? NO


The cost of perpetual bond is deducted from Profit+Loss before EPS is calculated

i3lurker

12,172 posts

Posted by i3lurker > 2022-01-23 10:19 |

Post removed.Why?

stockraider

30,111 posts

Posted by stockraider > 2022-01-23 10:58 | Report Abuse

Put it this way ...u need to differentiate between Perpetual Bond v Preference Share mah!..!

Legally Perpetual bond....is actual borrowing with no clear repayment or maturity schedule mah!
As long they pays the interest when due...the perpetual bond have no expiry period loh!
However....to avoid the perpetual bond....exist forever...sometime the investment bankers...sometimes set certain dates for review for potential redemption at the discretion of both borrowers or lenders say every 7, 10, 15 years loh!

Legally Preference share...or are actually equity.....they pay dividend instead of interest loh!
Preference shares....can also be classified as liability when they are contractually redemption schedule period of the bond mah!

For accounting treatment of Perpetually bond & preference share....they both can classified as equity loh...!
But for the portion due for redemption say within 1 yr....that is usually classified as short term liabilities loh!

During liquidation perpetual bond rank as liabilities whereas Preference share rank lower than liabilities loh!

For investors to assess the strength of balance sheet, it is preferably to analyse the perpetual bond as a liability, since u need to pay interest on it, although the bond is perpetual with no fixed term liablity loh!

For preference share assessment....it is preferably to analyse it as a liability if it has fixed period of redemption loh!

DO NOT BE CONFUSED MAH!

LU TAU BOH ?

Posted by SarifahSelinder > 2022-01-23 11:05 | Report Abuse

Alsvin dah la Yinson treated its perpetual bond as equity

Byk jenis perpetual bonds depending on d terms some r loan liabilities some r more akin to equity

i3lurker

12,172 posts

Posted by i3lurker > 2022-01-23 11:06 | Report Abuse

EPS = (Net Income – Preferred Dividends) / Weighted Average Shares Outstanding

actually any announced dividend is also deducted/must be deducted from net income.
This secret info is not shown in most formulas.

Thats why some companies announce dividend after the accounts are published.

stockraider

30,111 posts

Posted by stockraider > 2022-01-23 11:13 | Report Abuse

Do not get complicated mah!

Profit after tax
Minus preferred dividend
Profit attributable ordinary shareholders
Total Number of ordinary shares.
Eps on enlarge ordinary share.

That is the formula to compute the potential eps for ordinary shareholders mah!

stockraider

30,111 posts

Posted by stockraider > 2022-01-23 11:16 | Report Abuse

They can call a "duck" as "chicken" loh!

But as an investors analysing the business potential u must not be confuse loh!

Put it this way ...u need to differentiate between Perpetual Bond v Preference Share mah!..!

Legally Perpetual bond....is actual borrowing with no clear repayment or maturity schedule mah!
As long they pays the interest when due...the perpetual bond have no expiry period loh!
However....to avoid the perpetual bond....exist forever...sometime the investment bankers...sometimes set certain dates for review for potential redemption at the discretion of both borrowers or lenders say every 7, 10, 15 years loh!

Legally Preference share...or are actually equity.....they pay dividend instead of interest loh!
Preference shares....can also be classified as liability when they are contractually redemption schedule period of the bond mah!

For accounting treatment of Perpetually bond & preference share....they both can classified as equity loh...!
But for the portion due for redemption say within 1 yr....that is usually classified as short term liabilities loh!

During liquidation perpetual bond rank as liabilities whereas Preference share rank lower than liabilities loh!

For investors to assess the strength of balance sheet, it is preferably to analyse the perpetual bond as a liability, since u need to pay interest on it, although the bond is perpetual with no fixed term liablity loh!

For preference share assessment....it is preferably to analyse it as a liability if it has fixed period of redemption loh!

DO NOT BE CONFUSED MAH!


Posted by SarifahSelinder > Jan 23, 2022 11:05 AM | Report Abuse

Alsvin dah la Yinson treated its perpetual bond as equity

Byk jenis perpetual bonds depending on d terms some r loan liabilities some r more akin to equity

Posted by SarifahSelinder > 2022-01-23 11:18 | Report Abuse

Examples of Amounts or Other Items that May Be Included in the Other
Information

The following are examples of amounts and other items that may be included in other information. This list
is not intended to be exhaustive.

 Items in a summary of key financial results, such as net income, earnings per share, dividends, ....



ISA 720 (Revised), The Auditor’s Responsibilities Relating to Other Information


Other Information [or another title if appropriate, such as “Information Other than the Financial
Statements and Auditor’s Report Thereon”]


Management is responsible for the other information. The other information comprises the [information
included in the X report,7 but does not include the financial statements and our auditor’s report thereon.]
Our opinion on the financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based
on the work we have performed, we conclude that there is a material misstatement of this other information,
we are required to report that fact. We have nothing to report in this regard


Tengok ni

Our opinion on the financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.




Klau data used to calculate EPS are derived from audited figures (yg ni auditors ok) tapi cuma formula yg diguna is arguable mcn mana ada ka auditors responsible?

stockraider

30,111 posts

Posted by stockraider > 2022-01-23 11:25 | Report Abuse

Coming back to MFRS, IFRS, GAAP Standard...accountant treatment are different from legal treatment and the treatment of the investor mah!

It is better to call a duck a duck instead of accountants sometime trying to be smart calling a duck as a chicken and get confuse mah!

They can call a "duck" as "chicken" loh!

But as an investors analysing the business potential u must not be confuse loh!

Put it this way ...u need to differentiate between Perpetual Bond v Preference Share mah!..!

Legally Perpetual bond....is actual borrowing with no clear repayment or maturity schedule mah!
As long they pays the interest when due...the perpetual bond have no expiry period loh!
However....to avoid the perpetual bond....exist forever...sometime the investment bankers...sometimes set certain dates for review for potential redemption at the discretion of both borrowers or lenders say every 7, 10, 15 years loh!

Legally Preference share...or are actually equity.....they pay dividend instead of interest loh!
Preference shares....can also be classified as liability when they are contractually redemption schedule period of the bond mah!

For accounting treatment of Perpetually bond & preference share....they both can classified as equity loh...!
But for the portion due for redemption say within 1 yr....that is usually classified as short term liabilities loh!

During liquidation perpetual bond rank as liabilities whereas Preference share rank lower than liabilities loh!

For investors to assess the strength of balance sheet, it is preferably to analyse the perpetual bond as a liability, since u need to pay interest on it, although the bond is perpetual with no fixed term liablity loh!

For preference share assessment....it is preferably to analyse it as a liability if it has fixed period of redemption loh!

DO NOT BE CONFUSED MAH!

Posted by Neoh Jia En > 2022-01-23 19:43 | Report Abuse

@AlsvinChangan These four companies classify their perpetual bonds as equity. If you check their statement of profit or loss, the distribution paid to perpetual bond holders are not deducted from profit or loss. I have even cross checked these figures in the cash flow statement, and those distributions are indeed separated from finance costs deducted from profit or loss.

Posted by Neoh Jia En > 2022-01-23 19:48 | Report Abuse

@SarifahSelinder Interesting info on auditors' responsibilities. Unfortunately I am not an accounting professional so I don't know the details. In the first place, it could be me who are wrong about this.

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