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Revenue Recognition, Patisserie Valerie, Utilitywise and Cryptocurrencies

Revenue recognition is a hot topic at present as folks have come to realise that this is a frequent cause of company accounts misrepresenting the true state of the business. Quindell and Blancco are two examples and I cover Utilitywise below. But first let me report on the Annual General Meeting of Patisserie Valerie (TIDM:CAKE) which I attended this morning (as a shareholder of course). The company operates a chain of cake+coffee shops under the company name but they also have several ...

Quindell and Carillion

The Financial Reporting Council (FRC) have announced that they have fined audit firm Arrandco (formerly RSM Tenon) £750,000 and the Audit Partner Jeremy Filley £56,000 in relation to the audit of the financial statements of Quindell for the 2011 accounts. They also “reprimanded” both parties and Tenon had to pay £90,000 in costs. Both parties admitted liability. Two of their errors were a “failure to obtain sufficient appropriate audit evidence and failure to exercise sufficient professional scepticism”. In other words, quite ...

Government To Review Share Buy-Backs

The BEIS Department of the Government has announced a review of share buy-backs. That’s where the company buys its own shares in the market, a practice that used to be illegal but is now very widespread. Business Secretary Greg Clark said: “…there are concerns that some companies may be trying to artificially inflate executive pay by buying back their own shares. This review will examine how share buyback schemes are used and whether any action is required to prevent them from being ...

The Market, Renishaw and ASOS

We seem to be in one of those markets where investors are nervous because of a few big failures, some market commentators being bearish and the uncertainties caused by Brexit. While some of the “hot” stocks continue to power upwards, and the overall market trend in the UK is still positive, it only takes the slightest ripple to cause some stocks to fall sharply. That particularly applies to those where prices seemed to have got ahead of fundamentals. Yesterday (25/1/2108) Renishaw (RSW) ...

New Year Angel Competition

In light of the popularity of our Fat Santa and Scrooge competitions at Christmas time, we thought we would redress the balance and celebrate the beginning of a whole new year...