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As usual, extrader has been on google for answers, give it up ex, too much inaccurate info on there.
Ohh ex … your are so 2020
.." Which would you like to see on your balance sheet a true sale or a loan. .."
The 'true sale that isn't ' - an accounting ploy which is subsequently unwound - screws all your conventional ratios :
- revenue ? doubled
- profitability ? halved
- inventory days ? halved
- admin with the taxman ? doubled (that'll be popular in SME's)
etc , etc.
Its goes back to true sale extrader. Which would you like to see on your balance sheet a true sale or a loan. Increasing your sales by other means is an old trick. Car dealers have been doing it for years pre registering cars to increase their figures. Its nothing new.
The other point in the whole 'true sale' debate is that it's primarily going to be of interest to the weaker credits who've reached the limits of 'conventional' financing ie precisely the sector that SYME wants to avoid....ie we're back to the 'conundrum'.
No! IFRS15 is not done and dusted, regardless of what the PR company tells you.
here is the direct components of IFRS15, took from the IFRS site https://www.ifrs.org/issued-standards/list-of-standards/ifrs-15-revenue-from-contracts-with-customers.html/content/dam/ifrs/publications/html-standards/english/2021/issued/ifrs15/#about
"To recognise revenue under IFRS 15, an entity applies the following five steps:
identify the contract(s) with a customer.
identify the performance obligations in the contract. Performance obligations are promises in a contract to transfer to a customer goods or services that are distinct.
determine the transaction price. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. If the consideration promised in a contract includes a variable amount, an entity must estimate the amount of consideration to which it expects to be entitled in exchange for transferring the promised goods or services to a customer.
allocate the transaction price to each performance obligation on the basis of the relative stand-alone selling prices of each distinct good or service promised in the contract.
recognise revenue when a performance obligation is satisfied by transferring a promised good or service to a customer (which is when the customer obtains control of that good or service). A performance obligation may be satisfied at a point in time (typically for promises to transfer goods to a customer) or over time (typically for promises to transfer services to a customer). For a performance obligation satisfied over time, an entity would select an appropriate measure of progress to determine how much revenue should be recognised as the performance obligation is satisfied."
The main point of contention is the control, this part
"recognise revenue when a performance obligation is satisfied by transferring a promised good or service to a customer (which is when the customer obtains control of that good or service)."
The funding company or SYME do not have control of the inventory, they do not have the ability to sell on to another party with a margin of their choice! Due to this, the true sale may not apply to IFRS15. This is a question for the AGM because it is such an important and pivotal decision into the future of the company.
If this gets cleared up, it would give the SP a shot in the arm akin to the first IM. So it's really important to LTH's/Trader/Customers that you get names of companies who have done it and can look at their financial statements and see the accounting treatment. This aspect of the business has to stop being smoke and mirrors, and that's down to AZ to get it sorted and put the issue to bed!
Thanks for a 'hard' data point re the 'true sale' aspect, Theanalyzer.
The trade-off security margin generally wanted (50%) vs the margin proposed by SYME (15% ?) remains a challenge. And that's before taking account of the treatment of VAT.
IFRS 15 Response ( reminder)
Stock Company signs – at day1 - a purchase agreement with the Client company (inventory seller). So there are all the requirements requested by IFRS 15.
The purchase agreement envisages also a first profit for the Client company (economic substance). So no loss for the Client company at day1.
We invested 5 years to a have a unique innovative framework.
Please also note that similar transactions have been already made in the market.
Spot on - not long now
This last week particular feels like so much moving at speed - volumes picked up. AZ, as always been great in answering genuine questions in accordance with regulation / rules.
- more on this Friday....
Great reply Analyzer !
IAS 39 was superseded by IFRS 9 on 1 Jan 2018 so it looks like you need to buy a new accounting manual. In any case you are looking at wrong standard in any case because what matters is whether customers can record a sale under IFRS 15 Revenue when entering into the trade. There are some hurdles to be overcome in IFRS 15 such as bill and hold clauses, the nature of any repurchase rights and obligations etc but AZ claims he sorted these issues out with 2 of the Big 4.
Extrader, I will tell you now, TJ will be dancing up and down with delight and jumped in without hesitation,
Read proactive report, read the accounts, read the fintech bank RNS
And you will see why AZ says pi missed it ….
umbrella FUND …
All I hoped for. AZ reply to my question “you got the point”
later Extrader, I will really look forward to our time .. you won’t ..
Vext vapour why dont you ask? I aint know mans joey i have joeys though and if you had the chance to meet me i would upgrade you to be my joey instead of tws but you aint got it in you to meet so jog on :) gnite genuine ppl vext n the rest no man cares :)
This is my 'angle' :
it seems that SYME's USP is marketed as a way of 'squaring a circle' :
(1) Banks (some) already do 'inventory monetisation' (IM), by way of warehouse receipts, @ 1% cost (attractive) but only up to 50% (security margin) and 'on balance sheet' (not helpful to credit-stretched customer, OK for everyone else).
(2) SYME proposes IM off balance sheet , on basis of 'true sale' (which is useful to all customers) and offers up to 85% monetisation (good for all customers = extra liquidity); but bad for lender/funder, because of lower - 15% instead of 50% - security margin ; but at around 6% cost (= expensive, which means it will only appeal to the less credit-worthy, who have fewer options)
(3) However, to pass a 'true sale' test under IAS 39, the customer typically needs to receive 90 % of the proceeds ie SYME's SPC funder/bank lender is further reduced to a 10% vs 'conventional' 50% security margin.
(4) So, potential funders are being offered a much higher return (6% vs 1%); against less security (10% shrinkage vs 50%); on a portfolio of potential customers that will - because of (1) above - inevitably tend to be poorer credits.
The poorer the credit, the more importance the funder will attach to its security.
SYME has sought to credit-enhance the inherent security shortfall/transactional risks with a slew of measures : cash margin; credit insurance; technology (IoT, blockchain, RFID, etc).
Up to now, despite heroic efforts, SYME hasn't found any funders who think the proposed 'reward for risk' trade-off is sufficiently attractive. And it's not clear to me what can be done to change that fundamental sticking point.
Putting it bluntly, SYME has been trying (possibly quite sincerely) to put lipstick on a pig.
It would be fascinating to get Tom James's views on this conundrum."
Let's see whether anyone's brave enough to ask at the AGM.
Great posts peak gnite to you n all real ppl the rest find some train tracks :)
'all my posts are extracts from RNSs '
Not sure if any of that post was ever in an RNS?
Gold Medal performance Peak take a bow.
Certainly have silenced the mob tonight. Rest now you’ve earned it!
Some will be pleased to know that I've finished for the night - all my posts are extracts from RNSs ( regulated for false Sh.te) or from reliable sources (proactive) non of the have at the end " IMO"
A lot of hardwork and effort has gone into getting syme to the point of its 1st IM -the following IMs will be easier and much quicker - don't under estimate the achievements made to date and don't let your frustrations blinker what has been an incredible journey in unpresidented times - 1st IM is imminent and will be incredibly satifying both financially and mentally - if you've held strong well done ! If you've folded and changed sides - UP YOUR GUTS -LOSERS !
Vext vapour come on kid whats your angle as nobody gives 2 f….s about you or your ramblings lol
Proactive Research Analyst Ed Stacey presents his report on Supply@Me Capital (LON:SYME).
The firm offers an innovative technology platform to provide inventory monetisation, which can enable a wide range of manufacturing and trading businesses to improve their working capital position (via a “true sale” of the inventory to special purpose vehicles) and also provides a new asset class to investors.
Stacey says, based on both the inventory securitisation programme and the TradeFlow deal, we expect strong growth in revenues for Supply@ME in 2021, driving a rapid transition to profitability, with further growth in the coming years.
Q: How many stock brokers does it take to change a light bulb?
A: Two. One to take out the bulb and drop it, and the other to try and
sell it before it crashes.
Based on the intended schedule of issuance, and the additional revenue from TradeFlow, we believe that Supply@ME will realise a substantial uplift in revenues during the remainder of 2021. Successful delivery on the current pipeline should help to attract additional corporate clients in our view, and we expect revenue growth to therefore continue in 2022-2023. This revenue carries a strong gross margin for Supply@ME, leading to a rapid transition to positive profitability in our forecasts.
In addition to its pipeline of inventory monetisations, Supply@ME has a second revenue source coming on stream through its acquisition of TradeFlow Capital Management, which specialises in commodity trade finance, using a non-credit approach for inventory in-transit transactions, akin to Supply@ME’s current platform offering for warehoused goods. This acquisition will provide the enlarged Supply@ME group exposure to an expanded international customer base, and a range of deal synergies, including with reference to funding options. The deal completed on 6 July 6 2021.
The company has also agreed an exclusivity agreement with a global investment fund that will become the first external inventory funder for the Supply@ME inventory securitisation programme with reference to UK and UK common law client companies;
Further tranches of inventory securitisation notes will be offered to the open market, including via a Shariah platform; and
By virtue of the agreement with the Italian Banking Group, the company will accelerate the completion of self-funding agreements with other banks, which may co-operate closely with the fintech licensed bank