What happen to the building after 100 years?

It is a vague inclination to suggest a value of a fixed asset such as building (commercial or residential) the appreciation of which has got value estimates varying from average or above average. Nobody would really understand the whole picture of a building when its value appreciates every year and the locality of the appreciation is much greater than the golden triangle neighbouring the KLCC Twin Towers and The Renaissance.

We are not to declare the asset since building is in its very nature built on a piece of land. Many citizens ranging from those who are no longer accepted as the citizens due to political or ideological stances, to those who are trying hard to become one, are categorised as naive in acknowledging the fact that a building must be erected from a piece of land. And that the land is of course must be the most suitable for that building because the appreciation of the building itself is relative to the value of the land itself.

In the balance sheets of corporations or even giant banks or shadow banks, the market value of the land if it is treated as an investment, must be appreciated and the difference of the value (from the previous year with the current year) is always an appreciation of such an academic valuation rather than commercial reality representation. What I mean is that the value of such an asset is only to be realised when the asset is being sold in order to gain cash. The decision to sell the asset is not in the hands of the owners as we can see many companies do not have concrete company's resolution to adopt the sale of the buildings and many of the balance sheet items are so badly treated as having multiple doctrine of alienation on its own. 

The further the land is being scrutinised, the more robust the value attached to it is going to become, since a few land lots are in actual fact reclaimed land lots and that some of the dwellers in the buildings are not aware of that fact. Therefore, should the land is to be sold in order to realise the value as cash term, nobody would declare correctly the true and fair price of the building let alone the land. Surprisingly some people are so happy to have the land as much as freehold or maybe 999 years lease. One person in particular would be shocked tremendously when someone from outside Malaysia is asking to purchase the land.

We are living in a state of anguish and uncertainty should everybody is asking to buy land everyday and that the price is volatile and does not represent the true and fair view of the financial standing of the owners and corporations. Kuala Lumpur for instance, is a new face city. New face in a way that everybody has got different face now when you go shopping or sightseeing or even trying to find who actually go shopping. No wonder the rich and famous Malaysians and Singaporeans do not really like to shop in Malaysia the reason being the new face is not their taste maybe. 

Be it as it may, the best way to value the land ammortization in the balance sheets of corporations or even banks is to find new face. That new face is either tangible or intangible in view of the above robust valuation for the next 100 years. 

No Money But Obstacles

THE title as stated above would become a horror movie to be depicted if the producers are made of bankers and of those who are financing the bankers ; what an epidemic Zika kind of virus which induces the birth of another scary movie should the author is to be determined by a bunch of high level bank officials and academicians.

As the budget nears its debate so close to be as scary as the above movie in its entirety, a commet is falling down from the sky unknown to the people who are still struggling to calculate how much year end bonus they are getting should there be a bonus and the futility is still foreseen by those who are indifferent whether their salary scale is favourable or horrible.

The commet is so invisible. And only 1 person who reads this blog can understand fully my writing and can even translate it into Thai and also Kelantanese dialect. And the commet is in actual fact a proposal to advise the Finance Minister and his subordinates on matters how to avoid lack of cash.

The proposal - How to avoid lack of cash:-

1. Never spend more than what you earn.

2. Be prudent in spending.

3. Observe the flow of income in cash and non-cash so as to gauge the optimum level of savings and easy realisation of assets into cash. The latter is quite cynical since you are not dealing in such assets as your business. Depreciation in cash term shall follow through so you may opt to have cash equivalent instruments if you need to gain cash therefore. Examples of cash equivalent instruments are as follows:-

a) Bank Simpanan Nasional SSP Bonanza Certs. Many people are so eager to win free Beemers and Houses here.

b) Gold

c) Small loans given to confirmed and reliable persons (scary though).

d) Selling used items such as books. (Car Boot Sales / Online )

e) Producing high quality poems and arts for publications.

4. To increase level and to expand sources of income. Businesses are very weak income generator for the novice and only the most stable people (emotionally and metaphysically practising proper risk-hedge techniques), may they generate income. Alas, employment in any particular company has got its limitations and drawbacks too. Whatever it is, the income must suit your needs and qualifications. Only by doing business can someone gain unlimited income and nobody can control that.

5. Always find yourself cash-rich rather than indebtedness-prone-rich. Never commit what you can't commit (not a type of commet of course).

6. Complete your biological and basic needs for good food, health, entertainment, education, spiritual in the most optimum level. Be open minded and do not associate yourself with nonsense and unprofitable or non-cash generating ventures with people who are making use of you.

The commet is now touching the grass at an elite golf club facing the sea. Nobody knows how to play golf if they are taught to play congkak and badminton or else playstations. Like I said earlier, only 1 person can translate my article and that person is the one who does not know how to play golf before.

MALAYSIAN BUDGET 2017 : A COGNITIVE REFRAMING?

1. The month of September has become synonymous with the month of ghost or some people quote it as the most hectic month for preparing the budgets for 2017. Everyone is talking about huge companies that need assistance (or in dire need of being helped rather) to be a going concern with basic principles of accounting concepts to match with the dividend policies for the shareholders. Nonetheless, the very nature of the business now has become so chaotic due to political battles, industrial espionage and of course, the pressure from the middle class citizens (including those who claimed to be residents, notwithstanding). 
2. It must be noted that an asset (fixed or current) - such as motor vehicle, building, computer, laptop, smartphone - can be classified as a source of fund and can be used to generate profits (cash and non-cash and its equivalent). If you are struggling to search for uninterrupted source of cash, regard must be had as to the level of income in cash term so as not to mess it up with non-cash income (i.e. debt or promises to pay you cash).
3. Then, calculate how much is needed as cash in hand so as to prevent deficiency at any point of time. It is better to have excess in cash and access to the cash itself shall not deter you from gaining any other income and thus steady level of savings can be observed. Uninterrupted flow of income (cash) is achievable should you get to know how to maintain the flows nicely and try not to risk that flow to non-cash, non-income and non-returning cash flow items. This buffer is always not cared for or provided for by many big corporations and even SMEs and thus chaos always sets in when the accessibility to cash is not foreseen immediately; worse still, if it is not sufficient at all.
4. Greater details in how to formulate the best level of liquidity are not to be mentioned here since different persons / companies will have different sets of balance sheets / statements of affairs facing them. Basic genuine key equation is to never spend more than what you earn (sales, proceeds, income generating revenue assets, capital gains, sale of shares - must be transparent and at arm's length transaction and must include off balance sheet event items including investments by related parties). 
5. The exact phrase to denote the above is never to indulge in indebtedness (when your money is in your bank) in order to become debt free and cash rich corporations. So far Malaysia does not have a complete blueprint agenda to establish cash rich corporations as far as her Vision 2020 is concerned. This would be a  major factor for your bankers to suffer sleepless nights and some of them would become instant insurance agents if the the companies do not need more financing or loans. As a result, some bank managers are still under appraisal pressure (in the Key Result Areas drafting)  to formulate the best ways to approach these companies/ persons by saying that cash rich companies are not healthy and obese. It is a very challenging job for the financial controllers indeed. 
6. As financial controllers (in Malaysia the Finance Minister - so many people wish to hold this very position today), try to save as much as possible and spend as much as needed bearing in mind the buffer and deficiency risk-aversion techniques. Even when debtors are promising to pay the companies/ persons, the latter will always seen as beggars asking here and there, the very cash which is extremely needed for companies/ persons. It is easy if we are not indebted to purchase our personal or business assets in order to avoid any encrumbrances against our assets and current / future income. 
7. Companies and individuals must be matured in their spending and cashflows. Inflow of cash and profits (not cash) must be observed with care and prudent spending is a must. The companies and the financial controllers must be humble and should never show their assets / money / wealth to the mass since many parties are not meant to be associated with them. 
8. If you are a Finance Minister, how much salary in real cash term you need (I am not talking about banking inclusion here due to data privacy reason) if you are given the chance to ask for it?