Why did Tabung Haji report a profit instead of a loss in 2017?

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Tabung Haji Reported a Profit in 2017 Due to Accounting Practices and Undisclosed Financial Deficits

Lembaga Tabung Haji (TH) reported a profit of RM3.4 billion for the 2017 financial year, whereas it should have recorded a net loss of RM1.4 billion. This discrepancy arose primarily because the Malaysian Financial Reporting Standards (MFRS) were not fully applied, masking a critical financial position characterised by a deficit between assets and liabilities that had existed since 2014.
Failure to Apply Impairment Assessments and Accounting Standards

PricewaterhouseCoopers (PwC) had previously identified significant issues in its financial reviews of TH between 2014 and 2017. Specifically, TH had not conducted necessary impairment assessments on various investments, including those in associated companies, subsidiaries, and fixed income instruments. Furthermore, TH failed to comply with FRS 140, which pertains to the accounting treatment of investment properties, particularly concerning declines in their fair value.
Inaccurate Profit Distribution and Dividend Income Recognition

TH distributed profits, known as 'hibah', for the 2017 financial year without adequately accounting for the impact of impairments and the reduced fair value of its investments. Additionally, the institution recorded dividend income from its subsidiaries even in instances where these dividends had not actually been paid. These accounting practices contributed to an artificially inflated profit figure.
Contributing Factors to the Financial Crisis

The Royal Commission of Inquiry (RCI) report identified several underlying factors that led to TH's financial crisis. These included consistently high hibah payments, questionable accounting practices, a perceived lack of assertiveness from the Auditor General in addressing financial irregularities, the ambitious vision of positioning TH as a cornerstone of the ummah's economy, and escalating liabilities associated with Haj Financial Assistance (HAFIS).

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Why did Tabung Haji report a profit instead of a loss in 2017?

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