On the semi-annual financial statements of the company in 2012 Trang An Securities (TAS), the company has accounted for 62 billion of its interest in receivables securities trading activities. This will help the company reduce costs and thereby reduce the pressure drop in profits in the business. According to notes of the TAS, the company intends to allocate interest expense incurred but for customers struggling to recover debts.
Looking from the "sick child"
This is a "dodge" the cost of TAS that if someone did not read the financial statements and the notes will not be captured. That fact is not investors nor consumers have the financial savvy to that discovery. "Unique" is more TAS mortgagee from customers outside the listed shares also traded unlisted shares, the right to purchase real estate, real estate ...
But the company also said the statistics and valuation of these assets is relatively difficult. Thus, the reader of financial statements can not know exactly whether the collateral is sufficient to cover the borrower's account or TAS and the company's ability to record how much bad debt.
The risk here is that collateral has very low liquidity and difficult to identify possible offset losses if the debt is irrecoverable. If there are more stringent rules are applied, the suspicious items will be clarified but nothing has ever received collateral valuation is complete difficult to say exactly.
Another case is Securities Corporation SME (SME). SMEs have taken advantage of loopholes existing accounting system to hide the true nature of business operations. The company recorded revenues other a near 24 billion for the first six months of 2011, but no clear explanation is revenue from the activity, although this item accounts for nearly 70% of total revenue.
According to the notes of SME business travelers is that revenue from cash advance, working capital and sales revenue ... other services. Other services are services what???
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The performance evaluation is based on financial statements there are many challenges
The securities firms, experts have suggestions for the draft, but can see that from now until the draft officially applied, securities companies should prepare now both and human resources to make the system more closely acquainted with.
Expect significant changes
On I/2013 quarterly financial statements of the company stock, the cash items, it is possible that the company has been active securities and announced clearly separate customer deposits at the company is, this may be the first positive step.
Standpoint, auditors, more workload and will also generate audit differences, especially in the part requiring professional judgment as provision for impairment of financial assets ( for OTC stocks have no liquidity, the determination of the price to calculate market values are not simply redundant, auditors must apply the valuation methods such as securities companies often do ).
The determination of the company's bad debt securities is extremely important to investors in safe hands, avoid companies that have too many bad loans led to misappropriation of investor funds an illegal way. So should draft also stipulates whether securities firms have announced mortgage portfolio, including volume and share price. Based on this, investors will determine the value of the pledged stocks likely to ensure debts are not lending. Thus, investors can open an account at the heart of the prestigious securities firms, high liquidity. This market also being harassed by the mortgage company abruptly securities lending momentum to the market dips immediately sold to collect money.
It must be clearly stated, with securities firms, due to the volume of business too much, besides a number of objective problems, so the more transparent the problem is not always easy. But clearly, the pressure is transparency needs to be done, because it is good for the market, for both investors and the securities company.
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