nbs accounting - don't ignore the intangibles

A few weeks ago I asked if Practising Accountant could explain to us mere mortals the purpose of the 3 card, I mean 3 page, accounting trick presented by NBS in their 21st August draft accounts.

I first raised the subject of intangibles 2 months ago when I recommended NBS as a SELL; responses generally (I accept, not from PA) were clear, to the effect that because it was intangibles 'it didn't matter' and 'what does it matter' and 'not fussed', but I trust some will follow the point of this posting and its possible ending.

Why would the company wish to occupy 3 valuable pages of a draft set of accounts with the detailed accounting treatment of converting what is essentially 'goodwill on acquisition' into 'technical rights'? I have never seen such an exercise in many years examining accounts.

The obvious answer I expressed previously is possibly as a set-up for sale of the product rights - much easier to transfer 'technical rights' than to transfer 'goodwill on acquisition'; it's now a ready-made transaction waiting to happen

If it 'didn't matter', then it took valuable executive and audit time and 3 full pages to perform a pointless exercise.

Over to you Practising Accountant; I do not intend my posting to be fault-finding with you PA, since I would genuinely value your input on this matter, as requested on a previous occasion, but we have had numerous postings re NBS and I do not recall any which related to accounting, so the choice of moniker for all to see baffles me.

I trust you will be able to provide us with some options on why the company might have chosen to do what it did.

Could it be that the directors had far more foresight than we think: the balance sheet is now structured for a simple clinical transfer to parties as yet unknown, of the 'technical rights' to the flagship product of the business; who better to buy it than ...........?

Does it matter? well if they saw it all coming back in July/August when the accounts were prepared then it does matter; and of course it would then convert an ordinary sordid Hollywood commercial mystery drama into one which includes accounting tricks, so adding gravitas to what otherwise might be a simple little Malaysian scam on Australian punters.