We would love to hear your thoughts about our site and services, please take our survey here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Yes I understand all what you are saying. I am ACA. Under IFRS and FRS 102 you have to include as a non current provision. Yes this impacts p&l. I said it did.
How can that be true? It means you recognise items that do not or may not happen on the P&L / Balance Sheet. Once you add something to the balance sheet, it will impact profit when you release the accrual (it will be defined in P&L as a cost). Unless you start to mess about with adding imaginary revenue to match against the "cost" but audits would have a field day with that.
Do you think companies just write off money even if the decision goes their way or starts to **** up the balance sheet to make the impact 0?
They can disclose it in the footnotes in the "income statement" but don't need to include the numbers in the profit / loss or liabilities on the BS.
That's under GAAP and also IFRS. Basically the legal team will give them the info, they will then decide if they need to accrue for it etc
(I spend all day working with accountants and Commercial / Legal in work)
No. It used to be 50/50 but the standard changed a few years ago where you basically always have to recognise it. Contingent assets novated to 'virtually certain' as well. It's a more prudent approach over both.
You can't say it's a dividend trap when it's down 30pts before the dividend is even paid!!
Its not that clear cut.... its based on whether the threat assessment shows the liability is likely to take place. If its less than 50% chance then it doesn't need to be accrued immediately or recognised in the income statement or Balance Sheet. MCR saying their external legal team are saying its not likely and they appeal> so they may not make the full provision straight away. Normally it will be based on legal team plus historic court cases of similar nature. Management then make a judgement which they need to be able to firmly defend against any audit.
Contingent liability so it must be accrued immediately in full. It will go through as a one off so won't affect ongoing trading but affect reported EBITDA before adjustments. No idea on appeal lengths but these things are never quick.
I bought back in this morning. Surprised I was able to get in sub £5, but pleased I have.
If they do appeal this then wont they have a fair amount of time before a final decision is made and then even longer to pay this? That would mean the impact on numbers wouldn't be that bad.
So wont they just accrue a percentage every 6 months so that they dont take the hit at once. if it takes 2 years that's only 25% required every 6 months, 42 mill or so...
Do agree with sentiment though. Just seems there is never good news on its own, always followed up by something ****. They need to show massive improvement in next update plus they need to reduce some debt.
It's looking more and more like a divided trap atleast for nest 6 months... Every now and then they find themselves in some sort of difficulty... No wonder institutions are not loading up...