"Our interpretation based on financial disclosures is that this is a lease figure that is net of sub-leases to franchisees. When reviewing against the accounting standards, we believe that it is likely that the full lease obligation – including where RFG has the head lease agreement for an outlet with a shopping centre and has sub-let to a franchisee – will be consolidated onto balance sheet."
Firstly, the words "Our Interpretation" are so conveniently added at the front. The perfect "get out clause" , well what we are saying may not be fact ,,,, it could be complete bullshit ,,,, it is just our interpretation
Secondly, the new accounting standards to not relate to shopping centre or property leases. They relate to rental finance agreements the like silverchef and flexirent offer which are typically for shop equipment. the accounting standards want those "rental finance agreements" brought onto the balance sheet. ie the total liability. have a look at silverchef https://www.silverchef.com.au/funding under "our benefits". they promote the "off balance sheet funding"
i very much doubt RFG has much to do with franchisees "rental finance agreements" and hence would have nothing to bring onto teh balance sheet as a liability
RFG Price at posting:
$4.63 Sentiment: Buy Disclosure: Held
