BUR, page-6

I've always know IMF.ASX's  capitalisation of expenses to be a complicated accounting option, that diminishes the value/quality of the profits as disclosed, with the adoption of an Intangible Assets policy interpretation in its litigation contract accounting, and the capitalisation of (infuriatingly) interest costs, and some employee costs.  

When matching and prudence cross swords, I'd opt for prudent accounts.  

Let the accountants do the accounts, let me(?) do the subjective notional valuations.

I'd always assumed BUR.L adopted a simpler accounting. Well so I'd assumed, until I tried to fathom the BUR.L Statement of Cash Flows.  Firstly, trying to derive the line item amounts are as vexing, if not worse than they are for IMF.ASX.

Secondly:- The BUR.L cash flows statement reveals a substantial write down of recognised income to cash flows analysis that eliminates all cash operating profit, and instead, a substantial operational drain is revealed.  (Still can't see the derivation thereof, in most cases)

One step forward in the income statement, to two steps back in the cash flow statement.

That is disappointing!

Thirdly:- But a policy of "Fair Value" movement to litigation investment, is a substantial driver to BUR.L  Litigation investment income!  That rings massive alarm bells for me.

"Show me the money..." is my liet motief , and this is sadly a massive disappointment!

Sadly I shall be forced to drudge through BUR.L's accounting policies, to fathom how this "Fair Value" is derived. Y-A-W-N!

Does it need to be this complicated? I cannot fathom how a litigation investment 'accretes' value with the passage of time?

Hmmmm?

The Principle Accounting Policy note 2. 2016 accounts - devotes itself to a methodology that allows (but is not restricted to) eight ways listed i) through viii) on how to get there!  


Great. This is Bernie Madoff impressive.   

In any event - which policy in 2016:- Of $USD 87.818 million dollars of all litigation income of $USD 140.187  was due to a 'fair value' markup of the litigation investment.

That implies 63% of all litigation income for the year is notional, rather than, to my mind the substantial resolution of a court case, a cheque, or cash in hand.

That is to me, a lot of trust in an accounting policy.  When I seek to invest in a good litigator - accounting policies sell - cheap at their price!

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In so far as BUR.L have or do use Investment Vehicles?

They seem to talk of the selloff of their large cases Petersen & Teinver (?) as if it is to an Investment Vehicle? I am not sure.  Is the verbiage clear?

They talk of raising of 'Fund litigation-related complex strategies' @ $USD 500 million, in the 2017 half year disclosures.

I suspect the acquisition of Gerchen Keller Capital came with the insights on how to do so, and there seems to be some enthusiasm to do more  FLRCS's ?

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My gaol? To see if I can make a meaningful financial comparison between BUR.L to IMF.ASX

Grrr... it is not straightforward! Not in the least!