Investment firm Britam has said the recent downward revision of its 2014 profit by Sh342.3 million was done to reverse an erroneous accounting of its ownership of a 21.4-acre piece of land in Ngong’ in the previous year’s books.
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While the land was held by a subsidiary, it was accounted for as held by an associate company.
Adjustments to the 2013 numbers were also made in relation to the cost of guarantee on the Deposit Administration product fund and deferred income tax on a life business surplus.
Britam says the restatement of its profit came after it realised that any gains arising from Bramer should not have entered its profit and loss accounts as share of profit from an associate.
Bramer Properties Limited, a fully owned Britam subsidiary, acquired the land in 2013 at a cost of Sh327.6 million.
In accounting terms, Bramer does not qualify as an associate, which is defined as an entity in which a company owns between 20 per cent and 50 per cent equity with significant influence but no control.
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