High River Gold Mines Ltd HRIVF

Write Down??

[ThyFish]

Excuse my ignorance but what exactly is a write down?  Where is the physical cash written down going to?  If HRG has written down around 70 million.......where did the 70 million go to?  If debt is such a big concern why write down 70 million at this point in time rather than put it against debt?  Why not post the additional 70 million in earnings as a profit to get the sp moving and put the company in better financial standing before writing down?  I am extremely confused..............

Could you imagine where we would be if this 70 million didn't disappear......would the company not be in a better position to re-negotiate debt terms?  If this is an accounting trick will it last after year end or can it be reversed?  Who would regulate such a thing? 

I know there are a lot of questions here but if someone could shed some light it would be very helpful in trying to figure out exactly what they are up to!!

Thy Fish

[espressostretto]

Doesn't affect cash.  It's like you holding HRG...the market value going up or down doesn't affect your cash as it's all an unrealized gain or loss (ie "paper profit" or "paper loss").  Only once your HRG is sold does it become a realized gain or loss (and therefore taxable).  A bit tougher with unlisted/private investments as different people

[ThyFish]

Thanks espressostretto......but if it is only a paper loss then how is it affecting their earnings negatively?  How can it take them from profit to a loss?

[espressostretto]

Whether it is a paper profit/loss (unrealized) is irrelevant, it has to be marked to FMV (if determinable) per GAAP, and the only way the accounting will work is if it passes through the Statement of Operations.  Taken on a single number basis of total income/loss, yes, it looks like "earnings" are down, this will hide the earning power of the company.  So it is not entirely an