Sulja Bros. Building Supplies, Ltd (SLJB)

[nsomniyak]

I would assume that the audit expenses would hit after the end of the period being audited.

I'm not a CPA--so I don't know whether a company "should" accrue for an (expensive) audit. I certainly would not expect that a company stepping up to that audit level for the first time would have accrued for the expense.

Either way, I think this would be a wash--either the audit is accrued for in the year being reported, which knocks down the number for the past year but means it does not hit this quarter all at once, or it is not acrrued and we take an expense hit at once in Q1.

In both cases, the company reporting can be legit, and, from a cash flow standpoint, either way the auditors get paid in Q1, not in the period reported.

Not a big deal to me.

Given the few straws in the wind about "valuations" I think we'll probably be more interested in the assets they show (at what book value? after some write-downs?) and the depreciation expense streams implied going forward than about expense recognition details.