Financial assets available for sale (AFS) also increased mainly due to positive changes in fair value, additional investments and reinvestment of earned income. Also, there was a significant increase in cash and cash equivalents, mainly as a result of incoming cash flows from operations and financial transactions.
Property and equipment
Investment property
Other non-current assets
Trade and other payables
Interest-bearing loans
Derivative liability
Deferred revenue
Income tax payable
Post-employment benefit obligation
Deposit for future stock subscription
Treasury stock
Revaluation reserves
Retained Earnings
Non-controlling Interest (NCI)
Tuition fees-net
Other school fees
Finance income
Other income – net
In the same period last year, costs were incurred for the development of the registration system (Netsuite-EdERP). Expenses for the same period last year include professional fees related to the acquisition of RCI; no such expense has been incurred during the current period.
Test of Liquidity
Test of Solvency
Test of Profitability
Product/Service Standard
Founded in 1992, FEU Tech is a private, non-sectarian institution that provides quality education in engineering and information technology. The engineering classes have high pass rates on the professional licensure exams, with the best students among the board's top notchers.
Market Acceptability
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Items included in the consolidated financial statements of the Group are measured in the functional currency (see Note 2.15). Functional currency is the currency of the primary economic environment in which the Group operates. Any subsequent changes in the equity of the associate are included in the carrying amount of the Group's investment.
Financial assets are recognized when the Group becomes a party to the contractual terms of the financial instrument. A more detailed description of the categories of financial assets significant to the Group is discussed below. The amount of the write-off is recognized in consolidated profit or loss. ii) Financial assets carried at fair value - PVF.
Any gain or loss arising from derecognition of the asset (calculated as the difference between the net sales proceeds and the carrying amount of the asset) is included in consolidated profit or loss in the period in which the asset is derecognised. The difference between the carrying amount of the derecognized financial liability and the consideration paid or payable is recognized in the consolidated income statement. Rent received in advance is initially recognized as part of the Deferred income account in the consolidated balance sheet.
Other reserves refer to the amount attributable to the parent company arising from changes in NCI's ownership in the group. Any post-year-end event that provides additional information about the group's financial position at the end of the reporting period (corrective event) is reflected in the consolidated financial statements.
USE OF JUDGMENTS AND ESTIMATES
In identifying its operating segments, management generally follows the Group's product and service lines as described in Note 7, which represent the principal products and services provided by the Group. Each of these operating segments is managed separately as each of these service lines requires different technologies and other resources and marketing approaches. The measurement policies used by the group for segment reporting in accordance with PFRS 8, Operating segments, are the same as those used in the consolidated financial statements.
In addition, total assets that are not directly attributable to the operating activities of any business segment are not allocated to a segment. There have been no changes in the measurement methods used to determine the reportable segment's earnings compared to prior periods.
RISK MANAGEMENT OBJECTIVES AND POLICIES
The group does not engage in trading in financial assets for speculative purposes, nor does it write options. In order to reduce the group's exposure to foreign currency risk related to HTM investments in foreign currency, the management entered into a cross-currency swap agreement. The group's interest rate risk management policy is to minimize interest rate risk exposures to changes in interest rates.
The Group's exposure to interest rate risk arises from financial instruments that are subject to variable interest rates. The investments are continuously monitored to ensure that returns from these equity instruments are used or reinvested in the Group's favor in a timely manner. The Group's exposure to credit risk on its other receivables from debtors and related parties is managed by setting limits and closely monitoring said accounts.
The management of the group estimates that all financial assets are not impaired and are of good credit quality, except for those that are specifically designed for impairment at the end of the reporting periods. None of the Group's financial assets are secured by assets or other credit enhancements other than cash and cash equivalents as described below. The group classifies tuition fees and other receivables from students according to the number of semesters in which the receivables are outstanding.
CATEGORIES AND OFFSETTING OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES
Treasury controls and procedures are in place to ensure that sufficient cash is held to cover daily operating and working capital requirements. Management closely monitors the Group's future and potential liabilities and ensures that future cash receipts are sufficient to meet them in accordance with internal policies. All financial assets and liabilities are settled on a gross basis; however, each party to the financial instrument (in particular the related parties) shall have the option to repay all such amounts on a net basis in the event of default of the other party through the approval of both parties.
As such, the Group's outstanding receivables from and payables to the same related parties can potentially be offset to the extent of their corresponding outstanding balances.
FAIR VALUE MEASUREMENT AND DISCLOSURES
The table below shows the fair value hierarchy of the classes of financial assets and financial liabilities of the Group measured at fair value in the consolidated statements of financial position on a recurring basis as at 28 February 2018 (unaudited) and 31 May 2017 (audited). The following page describes information on how the fair values of the Group's classes of financial assets and financial liabilities are determined. a) Equity securities. NAVPU is calculated by dividing the total fair value of the fund by the total number of units at the end of each reporting period.
The fair value of the Group's debt securities consisting of government and corporate bonds is estimated by reference to the bid price quoted in the active market at the end of the reporting period and is categorized within Level 1. c) Derivatives. Management considers that due to the short duration of the Group's financial assets and financial liabilities measured at amortized costs, as described in Notes 2.5 and 2.10, their fair values on February 28, 2018 and May 31, 2017 are approximate or equal to their accounting values. Based on management's assessment, the best use of the Group's non-financial assets shown above is their current use.
Under this approach, when sale prices of comparable land in the vicinity are used in the valuation of the subject property without price adjustments, fair value is included in Level 2. Under this approach, the highest estimated costs used in the valuation would result in the higher fair value of the properties. Set out below and on the following page is a reconciliation of the Group's segment information to the key financial information presented in its consolidated financial statements (in thousands) for the nine months ended 28 February 2018 and 2017 and 28 February 2018 and May. 31, 2017.
PROPERTY AND EQUIPMENT
Below is a reconciliation of the carrying amounts of property, plant and equipment at the beginning and end of the nine months ended February 28, 2018 and the year ended May 31, 2017. Property and equipment includes construction in progress, which relates to costs , resulting from the ongoing construction of the FEU Alabang campus and the buildings and improvements of the university, EACCI and RCI.
INVESTMENT PROPERTY
A reconciliation of the carrying amount of investment properties at the beginning and end of nine months ended February 28, 2018 and the year ended May 31, 2017 is shown below. Reclassifications include FRC's cost of property held for sale, which has been reclassified to the investment property account. Information on fair value measurement and disclosures related to investment property is presented in Note 6.4.
There were no sales of investment properties during the nine months ended February 28, 2018 and the year ended May 31, 2017.
INTEREST-BEARING LOANS
The base interest rate is determined by the three-month Philippine Trading System Treasury Benchmark bid yields on Philippine government securities. a) In May 2016, the University received an interest-bearing loan of EUR 800.0 million from a local commercial bank, which was used for the general capital expenditure requirements of the University, including the financing of the purchase of a business and the general financing requirements of corporations. In June 2015, the University availed of a line of credit facility with another local commercial bank in the amount of P1.0 billion, intended to be used to finance the construction of a campus, including land acquisition. The loan does not have any material or restrictive covenants. e) In April 2017, RCI entered into a debenture with a domestic commercial bank in which RCI obtained P70.0 million in unsecured term loans maturing on January 29, 2018 with an interest rate of 3.5% per annum.
This loan was used as a draw on FEU's existing credit limit. f) In May 2017, the university obtained a P50.0 million. interest-bearing loan from a local commercial bank to finance the university's strategic investments and working capital needs. However, prior to the initial term, the bank and the university agreed to extend the term of the loan until April 2018. In August 2017, the university received a P200.0 million interest-bearing loan from a local commercial bank for general capital. expense claims.
In October 2017, the University received a P175.0 million interest-bearing loan from a local commercial bank to finance the University's investments and general working capital requirements. The loan is unsecured and does not have any material or restrictive covenants. j) In December 2017, the University received from another local bank a loan with interest of P60.0 million, with a term of 91 days. However, before the initial maturity, the bank and the University agreed to an extension of the term for another 91 days.
EQUITY
Retained earnings are legally limited to an amount equal to the cost of the University's treasury stock of P3.7 million. During the current period, the University has canceled the appropriation for the purchase of properties and investments, amounting to P250.0 million, as the purpose of which these divisions were made was completed.
EARNINGS PER SHARE
COMMITMENTS AND CONTINGENCIES
CAPITAL MANAGEMENT OBJECTIVES, POLICIES AND PROCEDURES The Group aims to provide returns on equity to shareholders while managing operational
SEASONAL FLUCTUATIONS
