SHJ (ASX) Ann: FY18 Half Year Results Announcement Date

Originally posted by ashleywd ↑

Thanks for doing God's work Tim.

You're right, Shine hasn't been using AASB15. My point is more or less just to point out circumstances of work in which Shine will not bill Revenue, but it would probably be more helpful if I were to refer to the correct accounting standard. I think AASB15 creates a much clearer rules around WIP as Revenue. Please correct me if I'm wrong but it seems AASB118 is the standard they have been following on revenue recognition which in my own not-very-legal interpretation leaves interpretation of the standards subject to an accountant's opinion. Probably the reason they decided to roll out AASB15 in the first place.

http://www.aasb.gov.au/admin/file/content105/c9/AASB118_07-04_COMPmay09_01-10.pdf

Page 14;

Page 15;

Page 22, - my opinion the 'best fitting' description of Shine's work would come under financial services, but I'm happy for someone else to counter with an alternative opinion;

More on financial services on Pages 23 & 24.

As far as 2012 goes, you're right it is unusual. Although are AASB accounting methods applicable to private companies? If not this would support the different accounting method idea that you have. Or it could be some other cause. This comes from the AASB118 doc on Page 7 & 8:

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My understanding is that a difference in AASB15 that's likely to have a major impact on Shine's accounting of revenue is this (page 27):

Constraining estimates of variable consideration
56 An entity shall include in the transaction price some or all of an amount of variable consideration estimated in accordance with paragraph 53 only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

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Mainly around the language "highly probable" whereas all language in AASB118 referred to "probable". Of course interpretation of the difference between "highly probable" and "probable" is very subjective. The paragraph following the one quoted (57) has some guidance here but it's really up to the accountant.

This section in AASB15 (page 37)- paragraph 93 implies that lead generation would be recorded as an expense in the year the cost was incurred. Though arguably paragraph 94 indicates that it might not apply to Shine:

Incremental costs of obtaining a contract
91 An entity shall recognise as an asset the incremental costs of obtaining a contract with a customer if the entity expects to recover those costs.
92 The incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (for example, a sales commission).
93 Costs to obtain a contract that would have been incurred regardless of whether the contract was obtained shall be recognised as an expense when incurred, unless those costs are explicitly chargeable to the customer regardless of whether the contract is obtained.
94 As a practical expedient, an entity may recognise the incremental costs of obtaining a contract as an expense when incurred if the amortisation period of the asset that the entity otherwise would have recognised is one year or less.

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(20min delay)
Last 86.5¢		Change -0.005(0.57%)		Mkt cap ! $144.2M

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