Boardroom

I did not mean it directly wrote up its goodwill, but through acquisition of another 1/3 interest in its associate at a higher price, in doing so, the company can re-measure(write up) its original investment in the associate and at the same time, create goodwill due to the price paid higher than its book value.

(24-08-2011, 01:56 PM)freedom Wrote: I noticed the company had a huge jump in profit from its Singapore operation with almost flat revenue. anyone knows what's the reason?

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is it the gain on re-measure investment in its associate? accordingly, they wrote up their goodwill?

The re-measure gain of $11.038m is on the basis of Newreg as a 33% associate.

As the result of Newreg becoming a wholly-owned subsidiary the goodwill is taken up in the books. The goodwill of Newreg taken up in the books is 100%.

However the effective increase in stake in Newreg is only 67%.

As the result of this the original 33% investment in Newreg has appreciated in value thus the fair-value gain.

Does this make sense?

(24-08-2011, 03:16 PM)orang Wrote:

(24-08-2011, 01:56 PM)freedom Wrote: I noticed the company had a huge jump in profit from its Singapore operation with almost flat revenue. anyone knows what's the reason?

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is it the gain on re-measure investment in its associate? accordingly, they wrote up their goodwill?

The re-measure gain of $11.038m is on the basis of Newreg as a 33% associate.

As the result of Newreg becoming a wholly-owned subsidiary the goodwill is taken up in the books. The goodwill of Newreg taken up in the books is 100%.

However the effective increase in stake in Newreg is only 67%.

As the result of this the original 33% investment in Newreg has appreciated in value thus the fair-value gain.

Does this make sense?

It is allowed under the FRS 103 (should be 103).
It was the case of associate to subsidiary.
To do it, u need to revalue the investment in associate.
Once revalued, the revalued amount will form part of the cost of investment in Subsidiary together with the amount paid for the other 67%. Yes, such practice increase the goodwill for this case.
And yes, if New subsidiary can't pass the yearly goodwill impairement test, there will be a write down/provision.

Can someone advise how to value this stock with such high intangible asset or goodwill.

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Can someone advise how to value this stock with such high intangible asset or goodwill.

Next year will be a critical year to view how the full investment in the subsidary will bring about the synergies for Boardroom as it is obvious that the investment has eroded the net margins significantly due to higher increase in fixed costs compared to the increase in revenue.

On the topic of synergies, although there is no controlling interest in the subsidary or management control, I believe during review meetings that obvious synergies would be shared for win-win situations. Given my lack of knowledge on the corporate administration and share registration business, I personally doubt the possiblity of significant synergy arising from this acquisition. In other words, the high goodwill paid in my view may be somewhat unjustified.

have u consider buying gk goh to own boardroom?

From layman point of view, collaboration with UK Captia Partner seems to be a fantastic proposition. Darn maybe I missed the boat again..

From layman point of view, collaboration with UK Captia Partner seems to be a fantastic proposition. Darn maybe I missed the boat again..

You may not need to despair.
Boardroom has expanded into Australia, taking up a one-third stake in Newreg initially. Despite gaining full control of Newreg later on, Boardroom's profit has stagnated at around $9m.
Boardroom has also ventured into Hong Kong, China, Malaysia; and has tried other businesses. But all these have not added to profit.
Not sure how this new venture will work out.

The only consolation is the consistent 3c dividend.

You may not need to despair.
Boardroom has expanded into Australia, taking up a one-third stake in Newreg initially. Despite gaining full control of Newreg later on, Boardroom's profit has stagnated at around $9m.
Boardroom has also ventured into Hong Kong, China, Malaysia; and has tried other businesses. But all these have not added to profit.
Not sure how this new venture will work out.

The only consolation is the consistent 3c dividend.