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Net Profit Query

QuestionsCategory: Financials QuadrantNet Profit Query
John Loh asked 4 years ago

Hi Victor
I have difficulty as what need remove or add into the net profit. Based on the training material, we need to add or remove exceptional item such as impairment of asset, gain/loss or fair value.
Do we have list to show what are these impairment of asset, gain/loss or fair value so that it is easier to understanding? Where we can find these items to add or substract.

1 Answers
Victor Chng Staff answered 4 years ago

Hi John,
Exceptional items are subjective and highly dependent on the business itself. For instance, the company is in the F&B business and majority of the revenue is generate from restaurant. That particular the company sold a property and record a gain and also they revalue they investment and record a gain. Hence, sale of property and investment gain are not the core business of the company therefore you should remove it from the net profit. I hope my example is clear enough for you. If you still have any questions feel free to ask.