Janice, you once mentioned Miller to me as an example of a rare NYSE scam stock and a penny that had actually clawed its way up to the Big Board. I wasn't familiar with the company.
I'm working with a young accountant who's preparing for the CPA exam. I mentioned to him how Rennova Healthcare (Pink: RNVA) just bought a hospital for about $1 million and immediately booked it at $8 million, claiming Bargain Purchase Gain with a footnote in the 10Q warning that the gain might be subject later to adjustment, up or down.
Today I see that Miller has become the poster boy for misapplication of Bargain Purchase Gain. Miller took $4.5 million in oil assets and assigned a value of $480 million to them! KPMG's role as CPA in the fraud cost them $6 million in SEC penalties.
This gambit was all pretty new to me. Am I correct that the Bargain Purchase means of jacking up reported asset values and claiming income from that isn't tried often... even in sleazy pennyland? It's certainly a huge red flag.
Am I correct in expecting the SEC to question RNVA's action in jacking up the value of the acquired hospital?
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