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AYALA

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14 views

AYALA

Uploaded by

pernidasaskin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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ANG, MICHAEL ALBERT A.

ACCOB (K-37)

Ayala Land Inc. and Subsidiaries: Investments and Inventories

The consolidated Statement of Financial Position of Ayala Land Inc. and Subsidiaries contain
essential information that can be used to analyze the various accounts, and for this paper, the
emphasis is on Investments and Inventories. Investments are financial assets representing a
company’s right to receive cash or generate profits from different investment instruments. On
the other hand, inventories refer to stock of goods or services that a company intends to sell.
This paper will delve deeper into Ayala Land Inc., a subsidiary of the Ayala Corporation, a real
estate firm and land developer, on the basis of its investments and inventories, that will be
inferred from the balance sheet and notes to the financial statements.

Looking through the assets portion of the Statement of Financial Position, the investment
portfolio of the company are divided into Short-term Investments, Financial Assets at Fair Value
through Profit or Loss (FVTPL), Financial Assets at Fair Value through Other Comprehensive
Income (FVOCI), Investments in Associates and Joint Ventures, and other Investment Properties.
According to the notes, their Short-term Investments has a cycle of 3 months to 1 year and
consists of money market placements (in Philippine Peso and in US Dollar) that earns annual
interest. Financial Assets at FVTPL, are investments held for the purpose of trading, which
classifies it under the current assets section of the balance sheet. The company has been
investing in more investment instruments, like that of the BPI Money Market Fund, signaling their
aim of generating liquidity and a well-diversified portfolio. Ayala’s Financial Assets at FVOCI are
equity investments, based on the notes which show that the investment comprises quoted and
unquoted shares of stock in companies which the firm has no significant influence over. Lastly,
Ayala Land has investments in associates and other investment properties coming from their land
that was transferred as investment instruments. All their investments are increasing significantly
in amount aside from the short-term investments which faced a steep decline.

Evidently, as the largest land developer in the country, lots and units are the main
inclusions in its inventories. Based on Note 8 of the notes to the financial statements, the
inventory account consists of Real Estate (Residential and Condominium Units and Residential
and Condominium Lots), and Offices. These buildings and lands are well-managed by the firm to
ensure its profitability and increasing value over time. The acquisition and costs incurred for the
units and lots have significantly increased the value of inventories in the Balance Sheet from
104,371,611 in 2018 to 120,287,686 in 2019.

Based on the amounts reflected in the Balance Sheet and Notes to the FS, Ayala Land Inc.
and Subsidiaries is doing a good job at managing its investments and inventories, clearly showing
a good financial position in this aspect.

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