There is no new governance. ASIC do not recommend anything they simply investigate to see if any laws are breached including adequate disclosure. Bearing in mind interpretation of some accounting standards is very and constantly evolving often items such as revenue recognition and combination consideration is not black and white. Remember ASIC themselves endorsed Slater's revenue recognition practices back at IPO in 2007.
Some are quick to draw comparison with Quindell but there is a big difference. Quindell were far more aggressive booking revenue early in a case plus Quindell amortised case running costs over the entire case. Slater are far more conservative booking revenue as WIP (based on case type, experience etc - some cases Slater don't book any WIP until completion due to uncertainty) and they book case costs as they arise in full.
The accounts are what they are, assets and cash inflows cannot simply disappear. Slaters themselves have spoken about evolving standards and are now moving towards cash accounting. That is billing on settlement. That may have a one period impact as WIP already booked washes out but the market will understand that.
SGH Price at posting:
$2.59 Sentiment: Buy Disclosure: Held
