Thanks for the response. It is point 5 that gets me thinking... to 'only include highly probable' revenues. Now with all their 'no win no fee' cases, which I believe SGH are famous for, my personal opinion is that anything that is pending a court decision is not 'highly probable', with the exception of maybe very few where there is no doubt of the outcome, although Im not sure why someone would use 'no win no fee' is the outcome was essentially certain - it's an expensive way of going about litigation.
As such, it could be quite easily interpreted from this standard to not include any revenue from 'no win no fee' cases.
It is the lack of any 'risk calculation' attached to the contract, that makes me consider this standard is not highly suited to SGH's business i.e. if you have 10,000 cases on your book, each with a 50% chance of success, none are highly probable, however it may be fair to recognise up to 50% (I would suggest less for the sake of prudence) of the potential payout. I imagine this is what they are already doing in some ways, and as such, this is not really in the spirit of the standard?
None of this is necessarily a bad thing, and I thank you for your posts MA, as it clarifies in my mind at least why there is such uncertainty around the accountancy of law firms... so much room for creative accounting! I guess we will find out on the 29th is how creative SGH's accountants have been!
Also, regarding the current share price, wow.... low volume tho for the movement tho...
SGH Price at posting:
68.0¢ Sentiment: Hold Disclosure: Held
