CTD - Chart, page-100

The revenue recognition query has been well and truly dealt with in the past. What the article, Taylor Collision or VGI do not say is:
Accrual Accounting is a normal accounting practice
The revenue recognition accounting change by CTD is in line with Australian Accounting standards.
Accounting Standards are set by Accountants not Analysts.
Just like Trumps tax cuts cuts it basically only has a one year benefit which is not material anyway - financial year 2018. And that year has passed. CTD disclosed that the benefit to profit was $0.5 million and not material. Basically,it just recognises commission when it is confirmed by the agent even if the cash is not received until the next period. Because you do this at the end of each period it pretty well cancels out. Accrual accounting is regarded by accounting standards as the correct way to show revenue earned in the period.
There is nothing secretive about the revenue recognition policy of CTD. Its explained in note 1 of the Half Yearly report.
Its is the same principal where a business makes sales on credit terms payable in 30 days. The revenue is recognised at the date of sale even though the cash is not received for 30 days. Normal and usual accounting practice.
Seriously this is Year 11 Accounting 101. Either the analysts for VGI and Taylor Collision are incompetent and have no understanding of basic accrual accounting or they are deliberately presenting it this way to scare the market. If they do this what else are they getting wrong? It will be interesting to see the coming report whether the cash conversion claims of VGI prove to be incorrect. After all their carry on they will lose total credibility if they are wrong.
Joe Aston in his articles makes the same sort of incorrect statements.
Details of other issues regarding Europe in the article are scant so we will have to wait for a response in an ann and questions in the meeting on Wednesday. It will be interesting.
If CTD are not presenting their accounts in line with Accounting Standards then the auditors would be compelled to issue a qualified audit report. As there were no auditor qualifications in the half yearly report which was after the VGI report it indicates the accounting issues raised were in line with standards. The auditors will be compelled to consider the alleged accounting issues raised by Taylor Collision. If CTD were not recording revenue in accordance with Accounting Standards then they would be compelled to qualify their report.
The volume based incentive revenue Taylor Collision raised were fully disclosed in Note 1 to the half yearly. Its common practice. It is in accordance with the Accounting Standard AASB15. Again is it presented in a way to scare the market? Analysts should be banned from commenting on Accounting standards application because they just can't get it right.
In the meantime the SP is drifting down and the unforeseen Hong Kong issue could well see it continue the drift and we may see a compelling top up opportunity later. This shorting experience demonstrates how saturation media even if not correct does feed fear and it works. We will know more on Wednesday.
I might be overly cynical but is there any chance the report was issued in a timely manner to counter the effect of any bounce due to a good report on Wednesday? It appears VGI had basically given up on a bad 2019 result. The shorts will be desperate to stop any SP run starting as a run can really get going on the back of some solid momentum shift. If so, shows the lengths they are prepared to go to.