The decrease in the balance is mainly due to the net loss for the current period attributable to the owners of the parent company. Debt-to-asset ratio measures the amount of assets provided by creditors relative to the total amount of assets of the Group. Equity-to-asset ratio measures the amount of assets provided by owners relative to the Group's total assets.
CORPORATE INFORMATION 1 Background of the University
Except for FRC, which is a real estate company that leases most of its investment properties to the University and other related parties, all other directly owned subsidiaries are operating as educational institutions providing basic education, secondary school and/or tertiary and postgraduate courses of study. . RCEE, before the cessation of its activities, was engaged in the sale of school supplies and food on RCI campuses. On August 24 and October 5, 2020, respectively, the middle and high school departments welcomed the first group of students of grades 11 and 7.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
As permitted by PFRS, these subsidiaries track their respective school years (i.e. quarterly and semesterly), hence the use of different reporting dates (non-contiguous year-ends) compared to that of the University. Functional currency is the currency of the primary economic environment in which the Group operates. a) Effective in Fiscal Year 2021 Relevant to the Group. Below is discussed relevant information about these amendments and revisions, the application of which, unless otherwise stated, had no significant impact on the Group's CCFS:. i) PFRS 16 (Amendments), Leases – COVID-19 related lease concessions.
The changes allow tenants, as a practical aid, not to assess whether special rent concessions that arise as a direct consequence of the COVID-19 pandemic are tenancy changes and instead account for these rent concessions as if they are not rent changes. Important changes include (a) increasing the prominence of governance in the purpose of financial reporting, (b) reintroducing prudence as a component of neutrality, (c) defining a reporting entity which can be a legal entity, or part of an entity, (d) revising the definitions of an asset and a liability, (e) removing the probability threshold for recognition and adding guidance on derecognition, (f) adding guidance on different measurement bases, and (g) stating that result or loss is the primary performance indicator and that income and expenses in other comprehensive income should in principle be reused where this increases the relevance or faithful presentation of the annual accounts. Consequently, the partial recognition of gains or losses (ie to the extent of the independent investor's interest in an associate or joint venture) applies only to the sale of contributions from assets that do not constitute a business.
USE OF ACCOUNTING JUDGMENTS AND ESTIMATES
The amendments to IFRS 10 require full recognition in the investor's financial statements of gains or losses arising from the sale or contribution of assets constituting a business, as defined in IFRS 3, Business Combinations, between an investor and its associate or joint venture. common. In addition, PAS 28 has been amended to clarify that when determining whether the assets being sold or contributed constitute a business, an entity must consider whether the sale or contribution of those assets is part of multiple arrangements that should be accounted for as one. single transaction. .
RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group's exposure to price risk arises from its investments in shares classified as part of the financial assets on FVTPL and financial assets on FVOCI accounts in the consolidated statement of financial position. In accordance with the group's policies, no specific hedging activities are carried out in relation to these investments. The group's exposure to credit risk on its other receivables from debtors and related parties is managed through close account monitoring and setting limits.
Furthermore, none of the Group's financial assets are secured by collateral or other credit enhancements. With respect to credit risk arising from its financial assets, the group's maximum exposure is equal to the carrying amount of these instruments. The Group has no overdue but not impaired financial assets at the end of each year.
CATEGORIES AND OFFSETTING OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES
The preceding tables show the fair value hierarchy of the Group's classes of financial assets and financial liabilities measured at fair value in the consolidated statements of financial position on a recurring basis from:. The fair values of the Group's interest-bearing loans are classified under Level 3 of the fair value hierarchy. As of 31 August and 31 May 2020, the total estimated fair value of the Group's parcels of land and buildings and improvements classified as investment property is categorized as Level 3 in the fair value hierarchy.
The fair value of these non-financial assets has been determined based on the following approaches:. i) Fair value measurement for land. Under this approach, higher estimated costs used in the valuation will result in a higher fair value of the properties. There were also no transfers into or out of the different levels of the fair value hierarchy at August 31 and May 31, 2020.
SEGMENT INFORMATION 1 Geographic Segments
There were no transfers into or out of Level 3 fair value hierarchy during the periods ended 31 August and 31 May 2020. The Group's geographic segment, which is based on location of all the Group's school campuses, for the years ended August 31 and May 31, 2020 follows (in thousands). Presented below is a reconciliation of the Group's segment information with the key financial information presented in its consolidated financial statements (in thousands).
The gross book value and cumulative depreciation and amortization of property, plant and equipment as at August 31 and May 31, 2020 are shown below. A reconciliation of the carrying amount of property, plant and equipment at the beginning and end of three months ended August 31, 2020 and the year ended May 31, 2020 is shown below. Construction in progress refers to the costs incurred for the ongoing construction of the school buildings of Edustria in Batangas, RCI in Rizal, EACCI in Manila, FEUAI in Alabang and the new University building in Lerma St., Sampaloc, Manila, which be substantially completed by August 31 and May 31, 2020.
LEASES
The gross book values and cumulative depreciation and amortization of investment properties as at August 31 and May 31, 2020 are shown below. A reconciliation of the carrying amount of investment properties at the beginning and end of three months ended August 31, 2020 and the year ended May 31, 2019 is shown below. Total rental income earned by the Group from its investment properties amounted to P4.9 million and P9.8 million for the three months ended August 31, 2020 and 2019, respectively.
The direct operating expenses, including depreciation and amortization, insurance and property taxes incurred by the Group in respect of investment property, are presented as part of Depreciation and amortization, Property insurance and Taxes and licenses, under Expenses and operating expenses in the consolidated income statement. Based on the latest valuation report by an independent appraiser, the total fair value of investment property was P234.0 million as of August 31 and May 31, 2020. Fair value measurement information and disclosures related to investment property are disclosed in Note 6.4.
INTEREST-BEARING LOANS
EQUITY
This account includes the University's common stock held and purchased by FRC at various dates during the periods ended August 31 and May 31, 2020. A portion of the University's retained earnings is limited by the declaration of the dividend to the cost of the shares treasury, excluding the amount purchased and held by the FRC as this is considered a cross-holding at the end of the reporting period. During the period ended August 31, 2020, the University reversed portions of appropriations for the purchase of property and investment, the purchase of equipment and furniture, and the expansion and improvement of facilities, as the purpose for which these appropriations were made was accomplished.
Management believes that the University has de facto control of FRC even though it holds less than 50% of FRC's voting shares because it is exposed or entitled to variable returns through its power over FRC. Total cost of issued and outstanding preferred shares amounts to P1.3 billion per August 31 and May 31, 2020. Total cost of issued and outstanding preferred shares amounts to P728.0 million per 31 August and 31 May 2020.
COMMITMENTS AND CONTINGENCIES
Earnings (loss) per share for the three months ending 31 August 2020 and 2019 were calculated as follows: Unaudited) (Unaudited) Net income (loss) attributable to owners. The Group has entered into transactions that have resulted in obligations that are likely to result in an outflow of economic resources. However, as permitted by applicable accounting standards, the Group has not disclosed the nature and details of its provisions because it may harm the interest and position currently held by the Group.
There are other provisions and potential liabilities that arise in the ordinary course of business and are not recognized in the consolidated financial statements of the Group. Management believes that potential losses arising from these provisions, commitments and contingent liabilities will not materially affect its consolidated financial statements, but the Group has decided to generally allocate a portion of its retained earnings to cover such potential liabilities. OBJECTIVES, POLICIES AND PROCEDURES OF CAPITAL MANAGEMENT The Group aims to provide shareholders with returns on capital through operational management.
CAPITAL MANAGEMENT OBJECTIVES, POLICIES AND PROCEDURES The Group aims to provide returns on equity to shareholders while managing operational
As of the same reporting date, no final decision has been made by the courts in the above cases; therefore no provision for contingencies is recognised. This is in line with the Group's bank covenants with respect to its borrowings, which require the Group to maintain a debt-to-equity ratio of no more than and a debt service coverage ratio of at least 1.2x. The Group has complied with its covenant obligations, including maintaining the required debt-to-equity ratio and debt service coverage ratio for all years presented. During the most recent period presented there was no significant change in the Group's approach to capital management.
SEASONAL FLUCTUATIONS
