Replies to post #42455 on Decision Diagnostics Corp (DECN)

[Hedgefundstrader]

If you are interested you should ask them

[loanranger]

Others may not appreciate what this bit of bookkeeping wordplay amounts to, but I expect that you will.

The Q1 Balance Sheet contained a liability described as "Contingent legal fees" of $240,000.

The Management Discussion says:
"Contingent legal fees increased $240,000 (2015 - $0)
based on our expected current unbilled legal fee expenses."

So to put it simply the company recorded $240,000 in expenses in the quarter that represented their estimate of the legal fees that were incurred during the quarter but which remained unbilled at the end of the quarter.

The thing is, those "current unbilled legal fee expenses" AREN'T CONTINGENT ON ANYTHING...they simply have yet to be billed. Using the term contingent indicates that they won't be billed if some event or outcome doesn't occur and that is not the case at all.

Based on the company's own description that $240,000 should simply have been included with the other accrued expenses in the "Accounts payable and accrued liabilities" line (or on a line called "Accrued legal expenses"). Referring to it as contingent is deceptive. If those fees ARE contingent they shouldn't have been treated as expenses in the quarter.