itsa figures for oct to dec 2011, page-22

Hi browny144

Don't have much time but here's a quick reply. Don't have all the answers, but it's dawned on me that some unchecked assumptions were wrong. I could be wrong on details, but not the basic thrust. DYOR though.

Yes, typo on my part. The new legislation makes receipt of our fees less certain.

If the same accrual methodology is used each year, the annual results will pretty much be as you describe, with additions. My calculation for 2011 was:
Admin fee 15,900 contacts x $1,250 = $19.9m
Activation fee 4,300 x $1,400 = $6m
Insolvency & bankruptcy fees $10m
Total $36m

(with the close out of some type 1 contracts and the new additions, it's a coincidence we nearly agree for this year on contract numbers)

These are educated guesses and I could be wrong on the detail. But then you ask, how is the accounts receivable of $65m supported, and how was it created. Bear in mind it was only $18m in 2007! All the home loan receivables have their separate account, so we can ignore them. The $65m probably includes factor finance receivables & misc others, but the bulk has to be debt agreement accruals. These can only have been created by crediting revenue at some stage.

I have a calc that shows the run-out accrual. For simplicity, let's say it's the $19.9m above x 3 =$60m less impairment plus factor finance accrual, to get to the $65m. It fits well.

Again, I could be wrong on details but I don't think on the basic logic.