Longhorn Publishers Plc has announced a delay in the publication of its financial statements for the year ended June 30th, 2023.
“Longhorn Publishers Plc notifies shareholders and the investing public that the approval and publishing of the financial statements for the year ended 30th June 2023 will be delayed, “said the firm in a statement signed by Maxwell Wahome, the Group’s Managing Director.
Longhorn said this delay is arising from ongoing consultations regarding the interpretation and application of an accounting standard that may have a material impact on the financial statements of the listed publisher.
- Longhorn Publishers(LKL) closed its last trading day (Friday, November 3, 2023) at KSh 2.37 per share on the Nairobi Securities Exchange (NSE).
- The company began the year with a share price of KSh 3.00 but has since lost 21% off that price valuation, ranking it 48th on the NSE in terms of year-to-date performance.
The Longhorn Board of Directors has set a new target of no later than 31st December 2023.
The publisher was incorporated in 1965 and was formerly known as Longhorn Kenya Limited until November 2014. It was listed on the Nairobi Securities Exchange in May 2012. The company also has operations in Uganda, Tanzania, and Rwanda. Its main business is the development, publication, marketing, and distribution of educational and general books.
It’s not just Longhorn
Longhorn is having its share of accounting issues at a time when banks in Kenya are also grappling with the International Financial Reporting Standard (IFRS) 9 on Financial Instruments, which became effective on January 1, 2018.
- This standard replaced International Accounting Standard (IAS) 39 on Financial Instruments (Recognition and Measurement).
- IFRS 9 introduced a new method of determining provisions for expected losses on loans extended by lending institutions.
Banks are required to recognize expected credit losses at all times and to update the amount of expected credit losses recognized at each reporting date to reflect changes in the credit risk of financial instruments.
In the quarter ended June 30, 2023, the Central Bank of Kenya(CBK) reported that banks still experience challenges in the implementation of IFRS 9. These included a lack of adequate historical data for assessment and re-modeling of the IFRS 9 assumptions and parameters including Probability of default (PD) and Loss Given Default (LGD).
There was also a lack of automation of the IFRS 9 processes and reporting. Most banks have adopted a tight credit risk appraisal, ensuring that facilities are well-secured and that alternative sources of repayment are available. Banks are currently building on available historical loans and advances data to be incorporated and enhance the IFRS 9 assumptions and parameters including Probability of default (PD) and Loss Give Default (LGD).
Automation is being considered in the medium term.