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@Chalker, you never answered my question. You were adamant you have no investment in SYME so why are you constantly on here posting about how 'suspect' this all is???
@ Chalker I may be taking a simplistic view but to me this seems like the reverse of consignment stock, as long as both parties agree to the contract there will be no problem as long as the accounts are auditable & transparent
@extrader @weathergeek. Yes - derecognition will happen on any "true sale". The client company will derecognise the inventory and recognise revenue. However under ifrs15 that can only happen on transfer of control. Transfer of legal title is only one indicator of many when assessing transfer of control - see paragraph 38.
This is a big risk to the model and was identified in the prospectus. It's a complex specialised area - which is why AZ should release any accounting opinion that he has.
AZ has refused to do so. Reputable companies will be very wary of this. They will want to do their own thorough due diligence. I think many will conclude that transfer of control has not occurred. They will not be able to recognise the sale to stock company. And this becomes like any other form of inventory financing - i.e debt.
Well I have 5.4 million shares in this and 5-6p would change my life and I think we have a 50/50 chance of this now
Futuresbright, brilliant post, all will come to pass sooner or later,
Chair buys £1.5mil worth of equity says he KNOWS it will too lol
Great post apunter. The risk of the business model potentially being unprovable, contradicting regulations or failing accounting standards has passed. The risk is now in the delivery, acquisition of clients and getting contracts signed from both the investor end, and the company end. Those risks are too, almost nearing the point of mitigation. Hence why hopefully, next week could be colossal, and should become a much more expensive investment proposition on the other side of it (but still worthwhile for new investors with a lower risk appetite).
I think next week is the one I really do. Plus it's y birthday tomorrow and AZ owes me a present. Will best the boxers and socks everyone else will get me.
Apologies alll
Should not be investing hahaha
Sometimes I annoy myself as well as the derampers ..
All this talk of IFRS15 or any other accounting practice Is way way to late. Gone are the days I have to talk about B77
The company has moved on and we discuss institutional investing these days, if you think ii haven’t scrutinised every detail of SYME before they invested a penny, if you think we will get a RNS saying ‘oh sorry all we forget or missed a regulation, the games off’ then you just should be investing full stop.
Don’t listen to any of it, apply common sense ... IMHO
Hi Weathergeek,
Good stuff, thank you ! Esp the link and the 'decision tree' , which I think sets out the position 'not necessarily to SYME's advantage' (to misquote Emp. Hirohito.
From your extract :
.."Derecognition is the removal of a previously recognised financial asset [INVENTORY]from an entity’s [COMPANY'S] statement of financial position. In general, IFRS 9 criteria for derecognition of a financial asset aim to answer the question whether an asset has been effectively ‘sold’ and should be derecognised or whether an entity [COMPANY] obtained a kind of financing against this asset [CASH to EXTINGUISH EXISTING BANK FINANCE] and simply an additional financial liability [REPURCHASE OBLIGATION ] should be recognised."
https://ifrscommunity.com/knowledge-base/derecognition-of-financial-liabilities/
The decision tree provides several tests and the COMPANY'S 'continuing involvement in transferred assets [INVENTORY]' (warehousing, inventory-control, movement, insurance, responsibility for 'merchantability' etc) appears to suggest that it has indeed retained control.
You would think that SYME's pilots over the least few years would have prompted a test case to nail this down one way or the other.
ATB
@Chalker, SYME use derecognition
Derecognition is the removal of a previously recognised financial asset from an entity’s statement of financial position. In general, IFRS 9 criteria for derecognition of a financial asset aim to answer the question whether an asset has been effectively ‘sold’ and should be derecognised or whether an entity obtained a kind of financing against this asset and simply an additional financial liability should be recognised.
More here..
https://ifrscommunity.com/knowledge-base/derecognition-of-financial-liabilities/
Lyndhurst: your connection to Rodney Trotter as a business analyser comes to mind looooooool
Everyone say goodbye to Lyndhurst. I'm putting him in the green room
Very poor deramp. Amateurish in fact. Rumbled.
Bye Lyndhurst.
TheMaster.. spot on .. loving that response
Good night, and good luck
Problem you have now lyndhurst.People reading the board today will know none of those words are in the latest update of 10th September ..
and know your full of it.
Sometimes I read here and laugh sometimes a just shake my head in bewilderment
Right bed time, good luck, best of health to all
Until the model is a proven..and in this case, so far it is all pie in the sky with ‘targets’, ‘objectives’, ‘aims’...blah blah and totally ignored by the JP Morgan’s, etc etc it is not at all ‘simples’!
LionsGold...remember?
newbies beware..all a load of rubbish!
Filtered
Parry the link takes us to a locked twitter page
Is this chalker zulu? This is software mate, stay away, it transmits words through long distances.
@slippytoad. If I buy a house with a mortgage I can do what I want with that house. I can use it, I can sell it., I can knock it down. It's a real purchase and the party I have bought it from will record a sale. In SYME's model the stock company purchases (legally) the inventory - but does not take possession, and cannot use or resell the inventory. It just waits for the client company to "digitally" repurchase. You see the difference? With the house the buyer takes control. With the inventory the stock company does not. It is not a true sale from the client company. Simples.
@weathergeek - why don't you ask AZ for the accounting analysis which underpins the 'true sale' model? Or ask him which big4 audit firm (and office) provided the accounting opinion that supports this? It should be an easy thing for him to clarify - on a risk that he identified in his own prospectus.
Chalker logic... So buying a house is not a sale. I get a house for free, paid for by the bank with money they have lent me and then I give the bank their money back over time so no transaction has taken place.
This is a very educational thread for newbies.
The first post is pure excellence from @Apunter2.
It is focusing on fact, it is stating pay very careful attention to wording. Be alert, be suspicious even. Look out for specific words to determine what is being said.
It is then challenged by @Chalker with the old IFRS which has been covered in these threads a lot and which AZ has addressed in video interviews saying all is compliant.
Now notice the wording of Chalker
"I can't see how they can record a sale. The accounting standard ifrs15 is a control based model and control has not transferred. It's all smoke and mirrors."
Key point.. Chalker can't see it. So to him its just "smoke and mirrors"
An intelligent analysis
Now go and look at my thread on the "Non Ex Director"
Do you think he "can see it"
See his experience and if you have time, check the track record and past employment history of all the board. They are all listed on the SYME website. With links to linked in profiles.
https://www.supplymecapital.com/who-we-are/leadership/
Chalker can't see it. He also can't work out what is the model. This has happened time and time again since I've been on this board. Quite a lot who couldn't see it, are now investors. It's understandable to a certain extent as this is a new thing.
Lesson for newbies, pay attention to what people say very closely. Apart from typos or spelling mistakes haha.
@apunter2. IFRS is a global accounting standard. However there are some differences in how these standards are sometimes applied and enforced. Especially in more complex scenarios. Certain countries are recognised as having more robust accounting practices - even though there should be consistency in how this global framework is applied and enforced. This does not impact just accounting standards - it's in all walks of life.
What a load of complete rubbish this chalker is talking first he uses (IFRS) 15 then states
‘ - especially if these clients are based in Italy or the Middle East where accounting practices, and enforcement of them, are 'softer'
However the full title for IFRS-15 is -
International Financial Reporting Standard (IFRS) 15:
So chalked what exactly in these regulations are you complaining about
Just blah blah blah to create doubt, fill up the board
Oh forget it .. filtered
@cahoodle. This accounting issue is actually identified as a risk on page 18 of the company prospectus - you can check for yourself. I suspect this is why they have since started to work on the self funding model. They are much more likely to be able to convince a smaller number of clients through this route that really need the financing and will worry about the accounting later - especially if these clients are based in Italy or the Middle East where accounting practices, and enforcement of them, are 'softer'.