RE:RE:RE:RE:RE:RE:RE:Interview with Doug on Jan. 3Ciao wrote: alemyre wrote: Well, it will affect cash but not P&L. Otherwise it wouldn't have been accrued as at Aug 31, 2023. Let's see if Doug is confirming this on his next interview with Cameron. :)
This reference would concur with your thoughts:
Bonus and profit-sharing payments to employees are
a)not determined until after the financial statements are issued for the relevant period.
b)usually reported as current liabilities at the reporting date.
c)are a distribution of profit, so are debited directly to retained earnings.
d)not considered to be wages and salary expense.
https://www.cliffsnotes.com/tutors-problems/Financial-Accounting/48030898-Bonus-and-profit-sharing-payments-to-employees-are-anot/
The fact that it's on the year end statements as a bonus payable I really don't think a subsequent transaction to pay off that liability is a big deal. The bonus is already earned and effectively the same as if they had a $1.1 million balance on the LOC and paid it out in F24 Q1. Nothing burger.
In fact, unlike some, I see it as a positive indicator that F24 Q1 is going to be big top and bottom line numbers. We know how Doug is - he wants a clean balance sheet. He's not taking that entire bonus if operations put a strain on cash in F24 Q1.
Been wrong many times before but I feel pretty confident making this claim.