nbs accounting - don't ignore the intangibles, page-5

Thanks PA , but not good enough for me; reminds me of a mushroom farm.

Life is too short for all of this, as I’m sure you would agree, so I’ll be brief since it is clear we differ, and most if not all traders are not interested in intangibles!

With no other suggestions, I am now persuaded that the NBS book-entry transactions re the intangibles were designed to facilitate a subsequent speedy transfer of the intellectual property rights in the NBS principal asset.

Here is a summary of my understanding of your response:

The Accounting Standard states that where, subsequent to an acquisition, it becomes apparent that assets or liabilities acquired were not fully accounted-for then that may necessitate an accounting adjustment in respect of those assets and liabilities and/or an adjustment to the amount of goodwill or discount on acquisition.

That’s all that the AS is saying, in just those words; it addresses the question of ‘how’ to account-for a change in value of ‘goodwill or discount on acquisition’; it is not answering the question of ‘why’ a company would wish to go through that NBS reclassification; it does not provide any ‘reasons’ why a company would wish to do so, and it does not address the ‘why’ of the conversion from 'goodwill on acquisition' to 'technical rights'.

and if it does not matter what they are called or if there was no purpose in the change then the company could have simply ignored such an expensive pointless time-consuming and page-consuming exercise.

The use of ‘reclassification’ and ‘technical rights’ is from the company not from the Accounting Standard;

The normal amortisation process re intangibles, in particular ‘goodwill on acquisition’, would be to appraise the value or test for impairment and amortise according to policy; it is not necessary to go through a convoluted process of converting ‘goodwill on acquisition' into a potentially transferable entity called ‘technical rights’ in order to amortise the value.

On the subject of value, I agree that very little credibility can be given to the balance sheet value of NexCode, since Covenant Equity Consulting Sdn Bdn, ' used forecasts prepared by management and a PE valuation method to value Nexbis Sdn Bhd and the intangible assets it holds'; if the consultants had tested using their own methods then that would have been an obvious statement to make. The NBS forecasts and PEratio not provided.