Difference between the Acquisition Cost and Market Price of CCF Shares
First written in FY2017-Q2. 1 of 3 entries say "Restated". Latest entry: FY2017.
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- FY2017MaterialisedAnnual report
「The company decided to fully amortize the unamortized goodwill related to the CCF shares (¥5,047 million) and, at the same time, fully amortize the unamortized goodwill of Trade Finance and Investments PLC, an equity-method affiliate of CCF (¥102 million), thereby conducting a rigorous review of the carrying value of the CCF shares and related assets.」
In light of the gap between the acquisition cost and market price of the CCF shares and related circumstances, the company fully amortized the goodwill related to CCF. - FY2017-Q3RestatedAnnual report
「At the end of the third quarter of the current consolidated fiscal year, the valuation of the shares based on their market price on the Colombo Stock Exchange was ¥2,984 million. However, more than 80% of CCF's total issued shares are held by major shareholders expecting future growth rather than seeking speculative gains, and trading volume in the stock market is extremely low. The company therefore believes that CCF's current share price does not represent the fair value of a long-term investment.」
The company continues to explain that the market-based valuation of the CCF shares is below their carrying value and that, because trading volume is limited, the current share price does not represent the fair value of a long-term investment. - FY2017-Q2First statedAnnual report
「At the end of the second quarter of the current consolidated fiscal year, the investment value of CCF shares based on their market price on the Colombo Stock Exchange was THB 855 million, a substantial difference from GLH's acquisition cost of THB 2,462 million.」
The market-price-based investment value of CCF shares was substantially below their acquisition cost. The company stated that the shares have limited trading volume and that the current share price does not represent the fair value of a long-term investment, which should instead be assessed in light of expected future profits.