Hypothetical Example of balance sheets of a company, which issued Iedele© to realise their Intequity©

The company (PQF Ltd.) issued 1 000 000 ordinary shares of R 1 each during previous years. Other capital, raised previously, includes debt capital of R 500 000. The book value of the assets of the company was R 1 600 000 before the issue of Iedele. The Intellectual Property the company developed has a value of R 550 000. Intellectual Property does not appear on the balance sheet according to International Financial Reporting Standards before the issue of Iedele. After the issue of Iedele PQF Ltd. realised R 400 000 of their Intequity (Intellectual Property Value) and it appears on the balance sheet. The trademark of the company was recently valued at R 450 000. The market capitalisation of the company was R 2 500 000 before the issue and R 2 600 000 after the issue. The assumed rise in value of the ordinary shares of R 100 000 is because of new cash raised of R 400 000 and a better future expected by investors. The difference of R 1 400 000 between the R 1 100 000 equity value and the R 2 500 000 market capitalisation, before the issue, is represented partly by Intequity, which is represented partly by the company's trademark. The issue of Iedele during the 2008 financial year realised Intequity capital of R 400 000.

Balance sheets of PQF Ltd. during 2008 before and after the issue of Iedele

2008

2008

R '000

R '000

Capital Employed

Ordinary Shares

1 000

1 000

Retained Income

100

100

Iedele

400

Debt

500

500

2 000

1 600

Employment of Capital

Assets

1 600

1 600

New cash from issue of Iedele

400

2 000

1 600

Matrix which compares the main features of the three categories of capital used by PQF Ltd.