Replies to post #29762 on Sino Agro Food Inc (fka SIAF)

[prokopton]

Thanks, Treit.

"...a lot of revenue comes from construction and consulting."

I'm assuming that at the end of it all SIAF will end up owning those facilities. If that's the case and they're booking most of the $100 million revenue from "construction and consulting services", this tells me that most of that revenue is from accounting gain and little to do with their product sales. They're charging themselves and booking it as revenue. This is a practice not considered normal according to most accounting rules.

This is the norm as I understand it where I live:

--get money from investors.

--build facilities.

--book spending as capital expenditure. This should show a massive loss until the facilities are completed.

--generate sales from products at facilities. Then book revenues.

Company still has huge potential, but I think there could be some funky Chinese accounting going on here.