MARC HASENFUSS: Sorry, not sorry, Trustco
Namibian investment company Trustco was not thrilled by a recent FM article on its latest financial results
Namibian investment company Trustco was not thrilled by a recent FM article on its latest financial results. The group released a Sens announcement bemoaning "misleading statements" published by certain media practitioners around the accounting treatment of a reclassification of its properties. Trustco railed against the ill-informed opinions of some commentators who "maliciously labelled" the reclassification unethical.
To recap: in 2014 Trustco bought a company with properties to be developed and sold. These properties were deemed inventory, but a decline in the Namibian property market prompted management to review its plan. Trustco will hold the properties for longer-term capital appreciation and not for short-term development and sale. These assets are now recognised as investment properties rather than inventory. In its accounts, Trustco recognises "deemed sales of inventory" as revenue to the tune of R984m (the fair value of the assets) and states R291m as "deemed cost ...