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@AshMark, illustrative example 62 of IFRS 15 is clear in stating that a sale with a right of buy back needs to be shown as financing. The fact that 2 audit partners from the big4 (as per recent RNS) have not yet twigged this is irrelevant. They won't have even started the audits yet.
Parm asked the company to comment on the derecognition accounting and they stated it was "bullet proof". Parm posted their response. I am being generous is saying that they are only "misleading" investors.
AZ has been asked to provide the accounting analysis which supports the derecognition treatment. He has refused to do so.
@AshMark, I am pretty sure of two things. Firstly that the derecognition accounting does not work and secondly that the company is willing to mislead investors. I don't know that this is all a scam - and I would be very wary of expressing such an opinion without real evidence.
Clearly others, such as TW, have stated that they think this is all a scam. AZ stated he would take legal action against such individuals a number of months ago. I have not heard that he has done so.
The accounts being prepared should contain no real surprises. The 2019 audited accounts in particular are of little relevance given they will be of the old shell company. However there is one potentially very thorny issue. The auditors will need to make a going concern assessment at date of signing. That may lead to a very difficult conversation. What assets and funding does the company have that can support it during the next 12 months? It is likely running on vapours.
If only it had some inventory it could monetise....
I wonder how much cash SYME has left. It raised so little on IPO and has incurred all kinds of expenses and professional fees since.
I'm sure that someone will tell me that it now has the client deposits from onboarding. But I'd be surprised if they were paid in cash upfront. It would be pretty ironic if it was these clients, looking for working capital finance themselves, that were ending up providing the working capital for SYME. I'm starting to think that AZ really is a genius.
It's going to be interesting to see what happens if SH is not completed in the next 2 weeks (or if the amount financed is less than anticipated). And I mean completed in the sense of clients having received funds, not some further completion of paperwork!
The share has actually been stronger since AZ's options expired than I thought it would be. It may be down 10 or 15%, but I thought it had the potential to really collapse after that event.
One thing is for certain. Whatever the RNS actually says the first few posts here will contain numerous "wows" and "rockets".
@wolf, the plc group accounts have the 225m loss. The plc solus accounts will likely have very little in them, but will be the relevant accounts for assessing any distribution. I've no idea what restrictions there may be on the Italian entity when it comes to distributions (when paying up to plc).
All totally theoretical at the moment of course. I'm pretty sure this will all have blown up well before any dividend is ever contemplated.
The £225m loss won't impact distributable profits because it only impacts the group accounts. It is solus accounts that are used for assessing distributable profits.
However anyone who is thinking about dividends at the moment needs to take a reality check. This company has yet to complete a transaction!
@spotify, the problem is that there are just too many red flags with this company. And AZ has shown himself to be very willing to mislead investors. The latest was the RNS announcing new investors when really it was clearly about the chairman selling pretty much all of his stake. And yet there's been no explanation of the reason for his sale.
@SAM, we don't know who bought them. Or how long it will be until they find their way onto the market. It seems like a remarkable coincidence that the holding of each of these new investors is just a little less than 3% and therefore won't require a TR1 on disposal.
Telegram seems to be helping alleviate the frustrations of some posters. Those who want to hear posts which are primarily positive to syme can keep to that platform. And when they or others want to hear posts that are more sceptical and challenging they can check in here as they wish. This site was generally becoming too congested and hopefully this will help resolve that issue as well.
@deltafox, Syme appears to have only just finalised the operating structure and the legal docs. These docs will now be sent to the prospective clients and funder. These clients and funder will then decide if they want to proceed. SH is only complete once the funder and clients have signed on the dotted lines and funds have been transferred. Of course syme has not been clear on this - and I am sure that AZ is happy that PIs think this is all complete. But if it was complete he would be very clear on this point and of course provide hard numbers.
@shaytrade, that's right. But you derecognise inventory when making a sale. And it is the revenue standard that includes the guidance on when you recognise the sale.