Robex Resources Inc V.RBX

What would you do..

[Tree2tree]

..if you were the Malian government, and you saw a mining company fiddling with accounting entries in order to avoid taxes and negotiate for financial concessions?  If Nampala is actually making big profits as some believe, is this a smart move to protect their investment?  Looks more like a lose-lose situation for RBX.  Maybe a sign of desperation in an increasingly hostile political (and financial) environment?

[ABDPhil]

Accounting standards are strict, and it is these rules that determine what is recognized in the operating expenses and assets of the company. Operating expenses are subtracted from income and reduce taxes payable. For assets, it's the same thing, but the subtraction is done over the following years.   That said, Robex does indeed generate a lot of profit, with an EBITDA that now

[Tree2tree]

WTF???  I hope most readers realize that the phool is spewing total garbage at this point.  So writing down overvalued assets increases EBITDA?  And creates money out of thin air to reinvest?  Unbelievable nonsense.

[ABDPhil]

Yes, this is indeed the case, because the depreciation of the fixed asset will be subtracted from income. That said, it will reduce the result on which taxes are calculated. And less taxes to pay means more money stays in the company.   As a reminder, a fixed asset is an asset that is intended to last over the long term. Consequently, the cost of this asset must be depreciated over time