IFRS and Financial Reporting Act 1993 for receipts from customers

[tenzing]

Hi All, I'm fairly new to investing and FA and have a question I've been unable to answer myself.

I'm reading through the Skellerup (SKL) financial reports and found they switched from IFRS to the Financial Reporting Act 1993 in their 2008 report. In the 2008 report, they restated the comparatives for the 12 months ending June 30 2007.

They give some details of adjustments in note 32 (Impact of adopting NZ IFRS), however I'm unable to figure out why their "Receipts from customers" in the Cash Flow statement changed.

In the 2007 report, receipts from customers was $186,990k and in the 2008 report it was restated as $195,081k - this skews the data a fair amount when trying to work out trends in operating cash flows etc.

Can anybody shed any light on the change, and how to compensate for it?

[Snow Leopard]

Hi

This is an educated guess, as I have not looked at the reports in question, but it will probably be due to the 'timing of recognition of revenue'.

The circumstances giving arise to the different amounts may be peculiar to that (2007) financial year so any compensating could/would be well out.

Also beware that the accounting standards get little tweaks all the time and that other years may have minor differences across reports.

Best Wishes
Paper Tiger

[tenzing]

Thanks Paper Tiger. I'll need to do some more reading about "timing of recognition of revenue" as I didn't realise that it applied to operating cash flow.

Do you have any suggestions on how I could adjust for this? Is it possible to adjust or estimate based on the contents of the annual report?

[Snow Leopard]

What I wrote last night is probably wrong - but as I do not have the report my next guess will be equally badly informed and also wrong.

Next guess: Re-categorizing of revenue - does the total of operating, investing and financing add to much the same.

Do you have a pdf version of the thing?

Best Wishes
Paper Tiger

[tenzing]

No worries Paper Tiger, your help is much appreciated!

Here's the link to the 2007 Skellerup annual report: http://companyresearch.nzx.com/reports/nz/2007/SKL2007.pdf

And the 2008 annual report: http://companyresearch.nzx.com/reports/nz/2008/SKL2008.pdf - see Note 32 on p71 for some details on the impact of changing to IFRS

I've put a spreadsheet together to try and compare the two results and found that adding net operating cash flows and effect of exchange rate fluctations resulted in the same value, 10,952 - is this just a coincidence? Here's a link to the spreadsheet if anybody's interested in taking a look: https://mega.co.nz/#!psgQyIjS!kIXv3Ze4oIlwYrD3weAiiY2LzVGTvhmWUOgZpAT ZfjU

[Snow Leopard]

No worries Paper Tiger, your help is much appreciated!

Here's the link to the 2007 Skellerup annual report: http://companyresearch.nzx.com/reports/nz/2007/SKL2007.pdf

And the 2008 annual report: http://companyresearch.nzx.com/reports/nz/2008/SKL2008.pdf - see Note 32 on p71 for some details on the impact of changing to IFRS

I've put a spreadsheet together to try and compare the two results and found that adding net operating cash flows and effect of exchange rate fluctations resulted in the same value, 10,952 - is this just a coincidence? Here's a link to the spreadsheet if anybody's interested in taking a look: https://mega.co.nz/#!psgQyIjS!kIXv3Ze4oIlwYrD3weAiiY2LzVGTvhmWUOgZpAT ZfjU

Pretty confident that you have found the correct answer - well done.

Best Wishes
Paper Tiger

[Lizard]

Just curious if you have subscription access to the NZX research section or whether you are able to get to those report links via another route? I am interested that it is still possible to access the links directly, even though the companyresearch.nzx section is subscription.