LOM 2023 Annual Report - Report - Page 39
LOM
2021 ANNUAL REPORT
Other Income
Other income earned includes fees for settlement of client
investment transactions and dividends received related to the
Company’s investments. Fees earned for settlement of client
investment transactions and dividends received related to the
Company’s investments are recorded on a transaction date
basis.
Rental Income
Rental income consists of rent earned from the lease of office
space in the Company owned office building and includes rent
from related parties and is recorded on an accrual basis (See
Note 8).
Cash and Cash Equivalents
The Company has defined cash equivalents as highly liquid
investments, with original maturities of 90 days or less that
are not held for sale in the ordinary course of business. Cash
and cash equivalents can include time deposits, money market
funds and U.S. Treasury bills with original maturities of 90 days
or less.
Property and Equipment
Property and equipment is stated at cost, net of accumulated
depreciation. The costs of normal maintenance and repairs
are charged to expense in the year incurred. Expenditures
which significantly improve or extend the life of an asset are
capitalized and depreciated over the asset’s remaining useful
life.
Depreciation is recorded on a straight-line basis over the
estimated useful lives of the related assets. Leasehold
improvements are amortized over the lesser of the life of the
asset or the remaining lease term. Upon sale or disposition of
an asset, the related cost and accumulated depreciation are
removed and the resultant gain or loss, if any, is reflected in
earnings.
The useful lives of the Company’s assets are as follows:
Building
40 years
Computer hardware and software
3-5 years
Furniture and fittings
4 years
Leasehold improvements
4-6 years
Equipment
4 years
Foreign Currency Transactions and Balances
The Company has adopted U.S. Dollars as its functional
currency for LOMFL and all subsidiaries (including LOM (UK)
Limited and Global Admin Inc.) because the majority of the
Company’s transactions and assets under management are
denominated in U.S. Dollars. Bermuda Dollars and Bahamian
Dollars trade at par with the U.S. Dollar; therefore, no foreign
currency translation gains or losses are recorded in the
accompanying consolidated financial statements. Foreign
currency transaction gains or losses are recorded at the
prevailing foreign exchange rates on the date of the transaction
and are reflected in earnings for the year in the accompanying
consolidated statement of operations.
Securities Owned
Securities owned are investments such as bonds and equities
that are both marketable and non- marketable. These
investments consist of trading investments, securities received
as income from corporate finance transactions, privately held
securities, and other strategic investments. Realized and
unrealized gains or losses on trading securities and strategic
investments are reflected in earnings as net trading gains and
losses in the consolidated statements of operations. Realized
gains or losses are based on the average cost method of
securities purchased and sold. Security transactions are
recorded on a trade date basis. Marketable securities are
valued at the last reported sales price on the principal market
in which the investments trade on the date of valuation. Where
there are no sales on that day, the mid-market prices are
used. For securities with no readily available market price or
where the security is restricted, the securities are recorded
at the estimated fair value in accordance with U.S. GAAP. The
use of different assumptions or valuation techniques could
produce materially different estimates of fair value. These
securities have been valued with reference to observable and
unobservable inputs or valuation models that make use of
certain quantitative and qualitative inputs for similar securities
traded in active markets, in accordance with U.S. GAAP (see
Note 3, Fair Value Measurements).
Unclaimed Cash and Securities
Client funds received and unclaimed after a three-year period
are included as income under the category of other income.
Securities received and unclaimed after a five-year period
are sold and included as income under the category of other
income.
39
