BlockQuarry Corp (BLQC)

[loanranger]

"You like to post things that look serious from the 10Q."

It's not a 10Q. A 10Q is an SEC filing and ISBG isn't an SEC filer.


"Make some vague statement about it so it looks negative yet don't provide any information to prove what you are saying?"
One would have to know some basic accounting to understand my point, but I'll try to explain.

The company says this in its press release:
"ISBG's generated $439,740 in total 2016 sales, with balance sheet reflecting $310,680 in deferred receivables for the final quarter of 2016 in accordance to proper GAAP reporting."
However, it reports the following in its Quarterly Report:
Revenues For the Nine Months Ended September 30, 2016....$ 137,460

Obviously the company generated $137,460 in sales, not $439,740....representing a difference of $302,280. For some reason $310,680 (and not $302,280) appears on the Balance Sheet as a liability:
Deferred revenues $310,680

Assets are things a company owns and liabilities are amounts that companies owe.
The definition of "deferred revenues" is simple:
"Deferred revenue is not yet revenue. It is an amount that was received by a company in advance of earning it."
http://www.accountingcoach.com/blog/deferred-revenue
I've highlighted that phrase for a reason...ISBG hasn't received the $310,680. (That's obvious from the company's $2,577 cash balance and an informed reading of the cash flow statement.)

ISBG has to create an asset to justify recording and telling you that they had $310,680 in deferred revenue...as I said, they didn't receive ANY cash...so they say that they have $310,680 in "deferred receivables". BUT THEY DON'T. No one owes them that money (although they hope that some day someone will) so they CAN'T call that an Asset "in accordance to proper GAAP reporting". Their "deferred receivables" are actually "receivables we hope to have someday" and there's no proper way to account for such things.


In the simplest terms ISBG has created an asset and a liability in equal amounts, neither of which are properly recorded based on Generally Accepted Accounting Principles.
The company includes this explanation in Note 6 to the financial statements:
"However, the Company defers recognition of
revenues from sales to stocking distributors
until such distributors resell the related products to their customers. The Company has deferred recognition of revenues amounting to $310,680 as of September 30,2016."
That would be an acceptable explanation under GAAP if the company had already been paid for the goods involved....it has not.

One more time:
"Deferred revenue is not yet revenue. It is an amount that was received by a company in advance of earning it."

I hope that satisfies your request for an explanation. If you have a specific question about it, let me know.


https://www.otcmarkets.com/ajax/showFinancialReportById.pdf?id=165142