Sample Disclosure – Accounting Policy Of Investment Properties (19 January 2011)

Investment Properties

Investment properties are held for long term rental yields or for capital appreciation or both, and are not occupied by companies within the Group.

Investment properties are measured initially at cost. After initial recognition, investment properties are measured and carried at fair value.

Fair value is based on valuation performed by appointed independent registered valuer(s) taking into account factors such as the property growth and market in the surrounding area. The fair value of the investment properties reflects the market conditions at the balance sheet date. Changes in fair values are recorded in the income statement as investment properties fair value adjustment.

On disposal of an investment property, or when it is permanently withdrawn from use and future economic benefits no longer are expected from the property concerned, it shall be derecognised. The difference between the net disposal proceeds and the carrying value is recognised in the income statement in the period of the retirement or disposal.

Transfer to or from investment property will be made when there is a change in use of the property. The commencement of owner-occupation for the property would result in a transfer of the investment property to self-occupied property, included in category of asset named “Property, Plant and Equipment”. On the other hand, the end of owner-occupation of a property would result in  a transfer from the self-occupied property which is included in Property, Plant and Equipment to the category of asset known as “Investment Properties”.

If a self-occupied property became an investment property that will be carried at fair value, the revaluation surplus of the self-occupied property, included in Asset Revaluation Reserve account would be transferred to accumulated profits.

For a transfer from investment property which is carried at fair value to self-occupied property, the fair value of the property at the date of change in use would be treated as deemed cost of the property for subsequent accounting purposes.

For the transfer of investment property to prepaid lease payments, the Group have adopted the transitional provision stated in Para 67A of FRS 117 which allows the Group to retain the unamortised revalued amount of the property as the surrogate carrying amount of prepaid lease payments.

Sample Disclosure – Accounting Policy On Property Construction-in-progress (28 Ocotber 2009)

Property construction-in-progress

Property construction-in-progress is stated at cost and not depreciated. The property would be transferred to property, plant and equipment or investment property (depending on the intended purpose and use of the property) upon completion.

Note: The balance of unrecognized amount of property construction-in-progress compared to the contracted full price is disclosed as capital commitment

Sample Disclosure – Accounting Policy On Capital Work-in-progress (27 October 2009)

Capital work-in-progress

Capital work-in-progress is stated at cost and not depreciated. Depreciation on capital work-in-progress commences when the assets are ready for their intended use.

Note: This is usually disclosed as an asset category of property, plant and equipment. The balance of unrecognized amount of capital work-in-progress compared to the contracted full price is disclosed as capital commitment

Sample Reports And Financial Statements (20 October 2009)

Click Here For Sample In Excel Template

Warning: You may use this template and modify for your own use and distribute it without modification but please do not sell it to others without my consent.

This is a complete sample Reports and Financial Statements of a company with one subsidiary company prepared in accordance with Private Entities Reporting Standards in Malaysia and the Companies Act, 1965. It is in an excel template with the following items included:-

  • DIRECTORS’ REPORT
  • STATEMENT BY DIRECTORS AND STATUTORY DECLARATION
  • AUDITORS’ REPORT
  • CONSOLIDATED BALANCE  SHEET (THE GROUP)
  • CONSOLIDATED INCOME STATEMENT (THE GROUP)
  • CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (THE GROUP)
  • CONSOLIDATED CASH FLOW STATEMENT (THE GROUP)
  • BALANCE  SHEET (THE COMPANY)
  • INCOME STATEMENT (THE COMPANY)
  • STATEMENT OF CHANGES IN EQUITY (THE COMPANY)
  • CASH FLOW STATEMENT (THE COMPANY)
  • NOTES TO THE FINANCIAL STATEMENTS (THE COMPANY)
  • FINANCIAL RISK MANAGEMENT POLICY
  • SIGNIFICANT ACCOUNTING POLICIES (Comprising Financial Risk Management Policy, Basis of Accounting, Basis Of Consolidation, Goodwill On Consolidation, Investments and Property, Plant and Equipment, Impairment of Assets, Income Taxes, Revenue Recognition, Foreign Currency Transactions and Balances, Employee Benefits, Financial Instruments)
  • NOTE ON PROPERTY, PLANT AND EQUIPMENT OF THE COMPANY
  • NOTE ON PROPERTY, PLANT AND EQUIPMENT OF THE GROUP
  • NOTE ON INVESTMENT, INVESTMENT IN ASSOCIATED COMPANY AND PART 1 OF INVESTMENT IN SUBSIDIARY COMPANY,  TRADE RECEIVABLES, AMOUNT DUE FROM ASSOCIATED COMPANY, AMOUNT DUE FROM SUBSIDIARY COMPANY AND FIXED DEPOSITS WITH LICENSED BANKS,  OTHER PAYABLES AND ACCRUALS, HIRE PURCHASE AND LEASE PAYABLES, BANK BORROWINGS, SHARE CAPITAL, DEFERRED TAX LIABILITIES, REVENUE, PROFIT BEFORE TAXATION, TAXATION AND CONTINGENT LIABILITIES
  • DETAILED INCOME STATEMENT (This does not form part of the  Reports and Financial Statements but frequently included for management purposes and other means such as income tax submission)

Sample Disclosure – Land Held For Development And Property Development Costs (15 September 2009)

Land Held for Property Development and Property Development Costs

 

Land and development expenditure are classified as property development costs under current assets when significant development work has been undertaken and is expected to be completed within the normal operating cycle.

 

Property development revenue are recognised for all units sold using the percentage of completion method, by reference to the stage of completion of the property development projects at the balance sheet date as measured by the proportion that development costs incurred for work performed to-date bear to the estimated total property development costs on completion.

 

When the outcome of a property development activity cannot be estimated reliably, property development revenue is recognised to the extent of property development costs incurred that is probable of recovery.

 

Any anticipated loss on property development project (including costs to be incurred over the defects liability period), is recognized as an expense immediately as foreseeable losses.

 

Accrued billings represent the excess of property development revenue recognised in the income statements over the billings to purchasers while progress billings represents the excess of billings to purchasers over property development revenue recognised in the income statements.

 

Land held for development and costs attributable to the development activities which are held for future development where no significant development has been undertaken is stated at cost less impairment costs (if any). Such assets are transferred to property development activities when significant development has been undertaken and the development is expected to be completed within the normal operating cycle.

Sample Disclosure – Accounting Policy On Construction Contracts (15 Septemeber 2009)

Construction Contracts

Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the balance sheet date, measured as the physical proportion that contract costs incurred for work performed to date bear to the estimated total contract costs, except where this would not be representative of the stage of completion. Variations in contract work, claims and incentive payments are included to the extent that they have been agreed with the customer.

Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that it is probable will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred.

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately as allowance for foreseeable loss.

When costs incurred on construction contracts plus recognised profits (less recognised losses) exceeds billings to contract customers, the balance is shown as amount due from contract customers. When billings to contract customers exceed costs incurred plus recognised profits (less recognised losses), the balance is shown as amount due to contract customers.