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Thursday, 08/28/2014 11:11:26 AM

Thursday, August 28, 2014 11:11:26 AM

Post# of 1080
What I will touch on today is structuring of a company by international accounting standards.

First one has to understand how three entities are represented in revenue, as well as outstanding shares and how one will underwrite the other while one will be public, the other two private as well they can be of different business were one has no revenue with a lost and the other two could hold revenue of a significant size.


The three entities one being off the balance sheet were none liability debt represents the underwriting of equity as well as authorized shares and I will get into that in a bit. Revenue will be represented in the income statement often in the bottom half were the top half is represented by the public trading going concern of the newly formed entity.


The off balance sheet entity earnings as well as debt " equity " is represented in the bottom section of the equity portion of the balance sheet as well as revenue being negative or positive depending on brackets as well as wording in the notes associated in the financials or a sub addition of the financials.


One entity can go into a BK situation " chapter 11" while owing to another entity and its shareholders be it the one on the balance sheet or the one off the balance sheet or maybe both this debt is noted by following the history of the cash flow statement of the two entities on the balance sheet.


This maybe very complex to many investors but once followed and understood it becomes much easier too understand. An entity that has not gone bankrupt weather private or public has to trade in a twenty year period.


Do your DD at your local library to confirm what I have stated here for your selves. I'm not an accountant or hold any type of business degree but the degree of hard knocks and self study along with rewards from my pursue too understanding how it all works.


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