FormerXBC Inc XEBEQ

Wouldn't it be nice

[tamaracktop]

Wouldn't it be nice if the recent biostream order included a commitment in the form of a down payment?
A gesture of good faith?
I'm not familiar with their accounting practices but I'm thinking 20% down would be a boost to Q2 revenues of $5-$6 million with little or no associated costs.
Now That would do a number on their margins!

[trek01]

This is actually a practice when purchasing large equipment. I've seen 30-60% down with the order, another payment to make it 80-90% once equipment shipped, and the 10-20% after commissioning. But who knows how's their master service agreement structured.

[Newtrader1982]

well if that happens to be the case then 30 percent would add 10.5 million to revenue. That would surely put them over 30 million for a q. That would be amazing if they produced 30 million in q2 but I am gonna stick to my estimate of 26 million.

[savyinvestor333]

I am definitly not an accountant and someone else can probably opine on this better but I think they can not claim revenues until the actual work is completed. Isn't that what caused the problem a couple of quarters ago?  Claiming revenues for work not completed?

[tamaracktop]

I believe that problem was caused by claiming revenues for work that was completed but never paid for because the customer defaulted. In that case I believe the amount was $5 million. The component parts were then allocated to another project. This is entirely different. I could be wrong.

[sumpineh]

In our business,if we had a large commercial contract,we could invoice for a monthly draw based on how much of the work had been completed in that period.We would recieve a cheque 21 days later minus a 10% holdback.This helped to pay wages and material costs which would have incurred interest. It was considered a sale in the month that it was billed as opposed to a deposit which was not counted

[HonestAl]

TT. said  "..t I'm thinking 20% down would be a boost to Q2 revenues of $5-$6 million with little or no associated costs... -------------------- Wouldn't a down payment be classified as Unearned Revenue and not affect the Q2 revenues?