Angkharat Priebjriwat, chairman of a working committee charged with accounting standards, said yesterday the federation was conducting a hearing on the new standard, which would allow holding companies to book only paid-out dividends from subsidiaries and affiliates on their non-consolidated balance sheets.

"Under the existing standard, holding companies can book income or loss from an investment immediately after the subsidiary shows a net profit or net loss. But the new standard requires them to book income only when the subsidiaries pay out dividends," she said.

Listed on the Stock Exchange of Thailand (SET) are a number of holding companies. For example, Shin Corp earns 90 per cent of its revenues from Advanced Info Service Plc and the rest from other subsidiaries and affiliates, including Shin Satellite Plc, Capital OK Co Ltd and Thai AirAsia.

All income from an investment is now realised through the equity method, which allows holding companies to book income or loss in proportion with their investment. For example, based on its 42.86-per-cent stake in Advanced Info Service (AIS), if the mobile-phone company posted a net profit of Bt1 billion, Shin would automatically realise Bt420.86 million from the investment even before AIS paid a dividends to its major shareholder.

Angkharat said that the new standard was proposed by the International Accounting Standards Board, which wanted holding companies' non-con-

solidated accounts to reflect

their performance better. Non-consolidated accounts also influence holding companies' dividend pay-outs. So far, some holding companies have announced dividend payments, even though they have not yet realised income from their investment in subsidiaries or affiliates.

Angkharat said the federation was not in favour of the new standard, because implementation would cause trouble to several holding companies listed on the SET, particularly Siam Cement and Shin.

The holding companies would need to revise their financial results. If any company paid out dividends to its shareholders before realising income from subsidiaries, as shown in their non-consolidated results, the end product could be a net loss rather than a net profit. Angkharat insisted that this issue must be thoroughly considered.

"We are weighing options," she said. "What if we could postpone the implementation of the new accounting standard on the condition that every figure could be referred to the consolidated account? Still, we're not sure if this would be possible or what foreign investors would think about it. In considering whether our accounting standards are qualified or not, they usually compare ours with international ones. But we have to admit that once we implement the new standard, we should anticipate big trouble."

The federation has handed out questionnaires to listed companies and related agencies, and these should be sent back by tomorrow. Then the federation will weigh the opinions before proceeding with the new standard implementation.

"There remain a few petty questions that were not included in this questionnaire. But we can redo the questionnaire," she noted.