Yes, Im starting to think you are right. This post concerns you...

Yes, Im starting to think you are right. This post concerns you too @gsad1000 ... So I was wrong about revenue recognition practices... Well sort of. I was correct about how a2 used to recognise revenue, but I didnt realise that the standards have changed this year for all companies. I spoke to a relative who is a CFO for a logistics company. On a quick analysis, without looking at the financial accounts he offered his thoughts on what the issue could be. He identified 4 areas.

1. Apparently on Jan 31 Australia adopted the international accounting standards for revenue recognition. Companies weren't required to fall in line until their next reporting period - ie EOFY. He said that the new method caused corrections/adjustments to revenue recognition each year for which the implications can be massive for a company with such large revenue. Its further amplified if revenue is 'lumpy' ie periods of high sales (11.11 sales event), and low sales (the period after the sales events) - and can cause very material adjustments. He further noted that these sorts of things are usually picked up by accounting staff themselves earlier - when trawling through statements while interacting with auditors, which makes our current timing a bit off. It's still a possibility but if it is that, it is a massive fail by a2's accountants. This supports your theory @utsstudent - the CFO could be cleaning up the books.

2, Other accounting practices related to Lease Costs for financing activities or operational activities have also changed to fall in line with international standards. They were once considered very different costs in relation to the balance sheet, but now both have the same requirements for reporting. He doesn't think this is the most likely issue because a2 is a relatively capital light business model, but could support the wording issued by the company 'may' affect guidance". Apologies if I've described this one poorly - accounting isn't my strong point, and I was struggling to keep up - if someone understands this a bit better I would appreciate a correction. Again this supports your theory @utsstudent

3, Shipping costs into China are cheaper, shipping costs out of China are higher, however there are delays left right and centre. Also said no one wants to ship empty containers back to China which is causing issues. His company has been asked to hold onto containers at their premises because the shipping companies don't have space to store the containers. End result is he doesn't know how this might affect a2 - but it 'may'....

4, Tariffs - discussed to death.

If it is any of the first three points, particularly the first two, we could go into suspension while the accounts are cleaned up...