Ann: Funds Under Management and Advice, page-5

jace.h
There were impairments already in the Preliminary accounts for 16/ 17 - the 4E had 2 It now appears one was because they have capitalised in the accounts a present value of all Institutional mandates' future income -- an interesting accounting approach. Which they have to reassess each year for value? The loss of the institutional mandates will see a reversal of some of that capital value.

The other impairment appears to relate to the $ cost of the acquisition of CAML - now CGA. Presumably some of that capitalisation now also needs reversal, given the FUM today is $60m less than the FUM when purchased, despite new business of $175m ( CQG AND SWTZ ) - ie of the FUM of $672m at start date, some 35% apparently has been lost.

Another interesting accounting convention has never been explained. The seller of CAML ( CTN ) made it very clear in its 16/ 17 Accounts that control of CAML passed on 29th of June 2016. Hence , it had no staff expenses in the 16/17 year. CGA asserts in its 4E that it gained control on 29th September 2016. So neither company paid salaries, nor had any operating costs for that September quarter. Nor was any income earned from investment services for that quarter.

CGA's Cash Flow statement 4C in October 16 may give us a clue - Acquisition cost appears to have expanded beyond the balance of the capital costs of acquisition - to perhaps include the net operating loss for the September quarter. Now capitalised, it can be amortised over ? years. Not in P&L in 16/17.

( See also posts on today's release on "James Packer buys in" )

DYOR