GREY:CHALF - Post by User
Comment by
sasasa123on Nov 29, 2015 1:12pm
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Post# 24336348
RE:RE:I'm No Accountant....
RE:RE:I'm No Accountant....Did they disclosed this in notes.under IFRS they cannot put this in net income.
ShroodInvestor wrote: You raise a valid point Jim. The reason why they posted net income of $3.9m is due to a $12m unrealized gain on inventory (biological assets). This is because they are classified as an agricultural business and selling a commodity. Hence, corn or wheat producers follow the same accounting policy. This policy allows the producer to fair value finished goods to fair market value before they're even sold.
The real catch here is that they buried it in COGS to hide the negative gross margin from actual sales of ($3m) from sales of $2.5m. There must have been production screw ups and inefficiencies in that $5.5m COGS before the non-cash gain.