abc learning interim net profit up 62 percent, page-30

i am of the thinking tha these licenses are assets and we can apply the accounting for property revaluations to give an example......

Its been 8 yrs since uni but from memory in accounting if you were to revalue a property under the OLD australian accounting principles:

Assets = Liabilities + Equity

for every debit there must be a credit

increases in assets are debits; increases in liabilities or Equity are credits

If you were to revalue a property

you:

debit property Asset, and credit asset revaluation reserve

when you sold the property

you:

debit asset revaluation reserve, and credit revenue

PLUS

you then would debit cash at bank and then credit the asset

Under new accounting principles I dont think an asset revaluation reserve is used anymore and immediately revenue is credited???

So

you debit asset, credit revenue (revenue is recognised immediately pre-sale)

then when asset is SOLD you:

debit cash at bank and credit the asset

* Hey I havent done accouting in yrs so i may be wrong??

But it seems that revenues are recognised now for revaluations, whereas back then they were recognised once asset was sold and asset revaluation reserve was used instead to increase equity for the present

Any accountants or recent accounting grads or peeps that kow their accounting have any comments??

But you get the drift anyways that when an asset is revalued up, REVENUE is immediately recognised or something like 'unrecognised revenue' can ve used as a 'credit' to increase equity in the present

Like i said ill look into the old books and get back to you and see how this fits in with ABS's licenses.

Bottom line again is OPERATING CASH FLOWS

If theyre lower its because the lower margins from the US and soon UK businesses is weighing down on cash flow

So the milkman needs to renovate/refurbish many of the centres as well as close down a few and increase operational efficiency of centres to maximise revenue and minimise costs. Also the renovation/refurbishments are necessary to increase appeal ,and hence, increase revenue from greater enrolments.

I believe theyll increase the margins by minimising costs, managing the centres effectively and of course - increasing the enrolments in many centres to near capacity, like they did with the aussie acquisitions.

But can they get the margins up to the aussie standard of 20%+ operational margins???

We'll just have to wait and see

W Buffet has a point and i havent effectively examined the financials yet, but if OPERATIONAL CASH FLOW EX LICENSE REVENUES is sound 4 maintaining day to day running of the biz + pay divvys, then we have no probs!