ICPAS Financial Highlights for YE 31 Dec 2006

Dear friends,

The info presented here and as always is, is to help to raise awareness of things surrounding you. This is also part of the training to review financial statements.

How much did ICPAS receive from its members?
Answer – It received $2.7mio (a drop of 3.6% against 2005) from its members.

How much surplus did SAA, the training arm of ICPAS, generate in 2006?
Answer – Despite having generated a healthy surplus of $1.9mio, it has declined significantly by 16% compared to 2005.

What is the overall bottomline then?
Answer – On the whole, ICPAS registered $1.5mio surplus (a negative 34% against 2005). The significant drop in surplus could be due to:-

  1. higher expenditure in marketing & promotion activities and;
  2. more than three-fold increase in deficit in the Practice Monitoring Division

Administrative expenses grew 25% to $4.07mio for 2006.


The most significant activity in 2006 which impacted ICPAS’s cashflow was the acquisition of City Campus for $15mio.

  1. Cash and cash equivalents declined from $7.8mio to $2.2mio.
  2. ICPAS entered into a finance lease position of $8mio.

Should you wish to review the full financial statements, you may approach the institute.

ACCA Qualification – Underlying Intention #2

Dear friends,

In this posting, I attempt to BRIEFLY explain the main intention of all these changes.

In one sentence – ACCA intends to hard implant key values ie. professional values, ethics and governance into all aspiring members-to-be.

These skills are essential as the profession moves towards strengthened codes of conduct, regulation and legislation with an increasing focus on professionalism and ethics in accounting.

They will be examined at every subject (where applicable, with different emphasis) till the highest level in the new ACCA Qualification. They will also be a core element of students’ practical experience requirements. This point was stressed repeatedly in the recent lecturers’ briefing.

The intent is demonstrated by the creation of the compulsory online practical Ethics module for all new students.

The focus on ethics is not uncommon. It is a singular subject to be passed in the CFA programme. Given the many accounting blow ups in the recent years, I don’t think we are doing enough yet.

ACCA Qualification #1

Dear friends,

There are a few requests for me to give some attention to the new ACCA programme. So this is the first of my series.

What is the name of new programme?
Answer – Boringly and amazingly obviously called – “ACCA Qualification“.
The programme was officially unveiled in Jan 2006 for implementation for Dec 2007 exams. That effectively crystallised the effort started back in Nov 2004.

Still the same number of 14 subjects but with significant change in the content of the respective subjects. It will change so much that you will NOT be able to correspond 1 from the old programme with another from the new programme. Example – Paper 2.1.

There is also the online Professional ethics module for new intake students to complete. I was briefed that they will actually track the time you spend on going through the module. Not compulsory for existing students. But you are encourage to do it.

ICPAS membership profile

P/S – A crowded house.

Hi friends,
Last week, I reported on ACCA’s membership profile. Tonight I wish to share with you the profile of 18,143 ICPAS members from the latest annual report.
In terms of gender distribution, female members represent about 63% of total membership.
In terms of age distribution, it is as follows:-
  • 18.4% are less than 30 years old,
  • 43.5% are between 31 and 40 years old and,
  • 34.6% are between 41 and above.
Practising members are ONLY 4.5% of total membership while non-practising counterparts represent the significant majority of more than 70%.
In my next article, I intend to give you a glimpse of ICPAS’s financial positions.

Accountancy cannot be a mess.

In fact, “Accountancy, at its heart, is all about neatness. It is about of symmetry. It is about double-entry. It is about balancing things out. It breeds a feeling of control. The figures neatly agree. All is well with the world. Job done.”

This is the first paragraph from the article entitled “stay focused” by Mr Robert Bruce. It really wowed me with its simplicity and yet so encapsulating.

As accountants, are we always looking to put various transactions in different “boxes” quickly and efficiently, so that we can pass entries, balance our books and go home?

Mr Bruce also took a swipe at the auditors when he said, “Diligent auditors follow screen-by-screen, ticking all boxes, and then fold up the laptops and go home.”

He said the neatness give all of us a feeling that the job is done. But in fact it may not be and we could end up being at home for months after being fired for not doing our job. So Mr Bruce advised that we should tossed everything up in the air and watched how they come down to earth ie. undo the neatness!

Cheers to you, Mr Bruce. Interesting stuff.

CFOs, this is your job description.

P/S – a painting
Keith Stephenson, the advisory partner of PricewaterhouseCoopers and Asia Pacific leader of performance improvement came up with the list in an article written by Sonia Kolesnikov-Jessop of A&B.
  1. Complying with reporting requirements.
  2. Ensure no surprises.
  3. Getting the audit committee to give you a thumb up on your general standard of corporate governance.
  4. Get yourself to move from being a guardian of numbers to the frontline of generating shareholder value.
  5. Managing movement offshore.

There is a need for a CFO to move up the value chain, staying relevant and keeping pace with business development as rallied by Lim Yen Suan, executive director of KPMG’s Risk Advisory Service.

Is the general lack of such movement giving rise t0 a trend of non-accountants taking on the role of CFOs?

Revaluation surplus and tax issues with Yeo Hiap Seng

What is the issue?
Yeo Hiap Seng (YHS) said the revaluation surpluses ($215.3mio) accumulated for several pieces of land it owned are not taxable gain and has not made any tax provision.

PricewaterhourseCoopers, its auditors, has signed off on the accounts for the year ended Dec 31, 2006 while highlighting the “discrepancy” in the audit report.

The Inland Revenue authority (IRAS) has, expressed its disagreement with that position. It is currently reviewing the information submitted by YHS.

Further Explanation
YHS has chosen to make no provisions for tax liability on revaluation surpluses of $128.8 million and $86.5 million, on its tax counsel’s advice that they are capital accretion.

The Sterling / Gardenvista – condominium developments
Prior to obtaining the developer’s licence in Apr 1997, I presume that YHS would be saying that it was holding the land as long term investment or for its own use given F&B as its main business.

Only after Apr 1997, YHS, with the developer’s licence, is now officially in the property development business.

Thus any appreciation in the value of the lands it was holding prior to that date would go to Revaluation Reserve account. Thus YHS’s position that $215.3mio revaluation surplus is deemed not taxable.

In 2004, however, the IRAS said some revaluation surpluses may not be considered capital accretion. In Feb 2006, IRAS repeated that part of YHS’s $128.8 million surplus would not be considered capital accretion. It asked YHS for more information so that it could update its assessments. YHS made submissions to IRAS on June 9.

Mr Kaka Singh – ACCA Members Forum

Hi friends,

Wish to share the highlights of today’s forum at M Hotel with Mr Kaka Singh, the immediate past President of ACCA Local council in Singapore.

He said once there were too many doctors and lawyers, now we are short of them. Then there were many people producing only on 2 children, now we are short of people in Singapore. He was responding to a question from a member who expressed his concern that ACCA as a desired qualification may be eroded given the high membership level of about 5,000 ACCA members and 3,000 affiliates.

Mr Singh noted a uniqueness of ACCA programme when he related this story. He attended the graduation for ACCA students and met a doctor who went through and graduated. Mr Singh asked why he needed to go through the programme. The doctor said the ACCA programme allowed him to gain competence in dealing with numbers in his job as an administrator of a hospital.

  • The ACCA programme is the only avenue in Singapore that provides working adults and mid career individuals the opportunity to secure an a recognised financial training qualification part time.

CPD programmes under ACCA Singapore are priced on a cost recovery basis.

Mr Kaka’s final words today – “How good you are will depend on how prepare you are.”

P/S – Mr Kaka Singh is standing as a candidate for election to ACCA council in UK. Please give our support to him to ensure Singapore’s voice in international forum.

Return on Equity & Creditors’ Turnover in days

P/S – This is my feel.


Just completed my lecture on financial ratios & interpretations recently. Two stories related to the topic were sent to me. I wish to share them with you.

The first story from Paul. He said,
“Hi Edgar, I thought this was particularly relevant to what you have mentioned in your last class with regards to inventory ratios. Interesting to relate this to everyday news, especially in Singapore context. Paul”

Paul cited Daniel Buenas’s report that most S’pore companies are tardy paymasters and are worse paymasters than companies in China, Australia, Hong Kong and Taiwan. 52 per cent consistently late with their payments from a study done on 1,000 firms from 6 countries by Dun and Bradstreet (D&B).

Only 33 per cent of companies here were ‘prompt’ in their payments, which is defined as ‘consistently paying within the credit terms given to a business’.

The second story in today’s Busines Times said Singapore firms are among the Asia-Pacific region’s top companies by return on equity (ROE). This is according to a Dun & Bradstreet’s (D&B) study released yesterday.

Of the 1,000 companies ranked in the study, Singapore firms ie. Starhub Mobile and APL, Neptune Orient Lines’s subsidiary, took second and fourth places respectively.

StarHub Mobile recorded an ROE of 1,019.3 per cent. The fourth placed Neptune Orient Lines subsidiary APL achieved a 935.2 per cent ROE.

Wow! Amazing….

Why we should kill off "estate duty" asap?

The reasons for abolishing the estate duty are:-

  1. Together with income tax, GST and estate duty, it is a triple whammy for taxpayers. You are subject to tax from the first day of work till one’s last day on earth.
  2. We have a lopsided exemption limit of $600,000 for movable assets against exemption up to $9mio for residential property. This lopsidedness would ensnare many middle-income households to be liable for estate duty.
  3. Will the existence of the estate duty discourage wealthy retirees to settle in Singapore? Maybe. Maybe not. If the tax revenue from this source is relatively insignificant, why risk it?

Why Govt’s hesitation to remove the tax?

  • Allow me to speculate.
  • The Govt could be due to collect some real monies from the estates of tycoon Khoo Teck Puat and ex-OUB banker Lien Ying Chow. While last year’s estate duty collection maybe a “mere peanut” amount of $80mio, the coming years of rapidly aging Singapore should “help” to raise the collection figures on this front.
  • Alternatively, the Govt could be too busy to dedicate resources to review this area that affect only a minority but the very rich few.