DCD, as a layperson, regardless whether it is amortized or expensed, I do not see how the preparer of the Q could completely leave the transaction off. I always thought that Qs were supposed to chronicle the financial dealings of a company over a period of time. Pink regs call for reports to be basic, and presented in a fashion that can be understood by the average investor. In other words, it shouldn't take a CPA to explain what has happened, or not happened. But, if you are suggesting that there is a correct accounting process that allows for no recognition at all, then I would sincerely like to know how that works.
Your plea for correctness is not an unfair one. However, I don't see how we can get all the facts. This question has been discussed on this board several times in recent days, and some other accountants have weighed in on the veracity of the Q overall, and also this very topic. Additionally, the upgrade question has been asked in Town Hall by at least a couple of posters and the company has not responded. So, how do we explore all the facts when facts are not forthcoming?
Furthermore, it doesn't help assuage skepticism when there are obvious and critical mistakes in the same document that we are trying to sort out. Namely, the stated voting power of the preferreds, which are understated by 29,980,000 per preferred share. The significance of that difference is profound. Were it not for the new PinkSheet requirements; namely, the Attorney Letter of Current Information, we would not have known that the power of the Class Bs are far greater than would be understood otherwise.
Is that "voodoo accounting"? I don't pretend to know, but unlike the blatherings of an anonymous poster on an obscure chatboard, the Q financial IS a document that people use to gauge the performance of a company, and it WILL affect their buy/sell/hold decisions, as it rightly should. If the document is found to be not correct on one point, then is it not reasonable to question the correctness of the entire document?
Unfortunately, revelation comes in drips and drabs, and too often over considerable time. In the meantime, posters will speculate, both positively and negatively. Somewhere in between is the truth. I'm for getting to it, up or down.
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