Fewer than 30 listed companies should be adversely affected by the change in accounting policy implemented in the first quarter.

Holding companies will be the hardest hit, because most of their income is contributed by subsidiaries and affiliate companies.

Listed Companies Association director Pensri Sutheerasarn yesterday said the changes were just in accounting and that investors should consider both consolidated and company financial statements before making investment decisions.

Since the first quarter, listed companies have been required to submit both consolidated and company financial statements. The Federation of Accounting Professions said the consolidated financial statements would realise earnings of listed companies' subsidiaries and affiliates in proportion to their stake, while listed companies were eligible to book only dividends paid by subsidiaries and affiliates in financial statements.

Securities Analysts Association secretary-general Sombat Narawutthichai said holding companies would feel a higher impact than other listed firms, as they could from now on realise investments in subsidiaries and affiliates only after they obtain dividends.

He said there were many holding companies in the stock market.

Shin Corp for example, reported its first-quarter earnings plunged to a net loss of Bt1.18 billion in its financial statement. Yet it revised its comparative earnings for the financial statement in last year's first quarter to Bt5.34 million.

Sombat said, however, that the change in accounting method would not have any effect on business fundamentals and cash flow.

"It might make an impact in terms of dividend payments, because shareholders will receive lower dividends if listed companies pay them based on their company financial statements. The association thinks listed companies should pay dividends based on consolidated financial statements," he said.

If listed companies opt to pay dividends based on their company financial statements, Sombat suggested subsidiaries and affiliates of listed companies pay higher dividends.

Siriporn Chanjindamanee

The Nation