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QuestionsCategory: Financials QuadrantChanges in fair value on P&L statement
Thomas Chua asked 2 years ago

Hi Victor and Rusmin,
May i check if the following items which appeared on China Maple Leaf annual report P&L are considered extraordinary items:
Change in fair value on redeemable convertible preferred shares
Loss on modification of redeemable convertible preferred shares
Change in fair value on warrants
Gain on cancellation of warrants
Seems like they are required for accounting purposes to mark to market these debt instruments previously issued but likely do not affect the company’s profitability or CF. Though they are certainly a cost to shareholders if share price rose sufficiently for the conversion feature.
Appreciate your advise, thanks!
 
 

1 Answers
Victor Chng answered 2 years ago

Hi Thomas,
 
According to the annual report these should be the extraordinary items:
 
Investment and other income
Other income, gains and losses
Change in fair value on redeemable convertible preferred shares
Loss on modification of redeemable convertible preferred shares
Change in fair value on warrants
Gain on cancellation of warrants