Presentation of Financial Statement Analysis

Presentation of Financial Statement Analysis Student Name Institution Course Professor Date Part 3: Transparency of Compliance and Disclosure Hang Lung Properties Hang Lung Properties follows the Hong Kong Financial Reporting Standards (HKFRS) for preparing its financial statements and has provided details of investment property valuation of the bulk of Hang Lung Properties' assets. Properties are stated at cost, and investment properties are measured at fair value by independent valuations (Hang Lung, 2021). Further, the company provides detailed information regarding the critical assumptions applied to property valuation, including rental growth and capitalization rates​. However, one particular concern is the unused market valuation sources of operations, net of cash tax. Most of its assets are from investment properties. Hence, they are volatile due to changing market conditions that affect profits. In the short run, should the external valuers decide to assume higher profits for the firm, profits will be overestimated, making it a critical red flag in the accounting process. New World Development Company Limited Like Hang Lung Properties, New World Development Company Limited reports its financial reporting based on HKFRS, especially with a potential emphasis on revenue recognition from property development and sales. The company explains its comprehensive policies in numerous joint ventures and subsidiary concerns and how it allocates profits and liabilities in these concerns (NWS Holdings Limited, 2022). The percentage of completion method for property sales commonplace in the industry ensures that revenue matches the level of project completion. Nonetheless, there are some red flags in the reporting, such as the company has a very complicated corporate structure, especially regarding the joint venture. The timing of some revenues could be accelerated or deflated, which magnifies overstatements or understatements in some periods. Moreover, such new factors as unique purpose entities (SPEs) that might be applied to joint ventures may hide off-balance-sheet risk factors. China Overseas Land & Investment Limited The company also follows the HKFRS, and the summary focuses on investment properties and properties under construction. The company considers the completi...