A lot of this is down to the wonderful (not) new international accounting standards. Mark to market is fine when the market is in the boom stage of the cycle- no one complained then, increases in valuations were declared as profits and dividends paid with borrowed money out of capital and of course the managers rewarded themselves grandly. When the market is in paralysis as now and mostly "stink bids" if anything are about, mark to market really fails because there isnt one. But of course the managers still reward themselves grandly. Dont know why anyone bothers with hedging. It is supposed to protect from losses but it always seems to cause them. Is AEZ in the business of currency speculation? No. So why do the clots do it? The deferred tax is more IAS bulldust, how can you have a tax if there is no profit to be taxed on? Governments in Europe and the US are slowly coming to the recognition that these new accounting rules are catastrophic poison junk. The previous ones were sounder. Why should you be forced to do all sorts of wealth destroying things if you intend to keep your property 20 or 30 years and you are cash flow positive in a big way fully tenated and meeting your obligations? Keep seeing references to US and European govts reviewing mark to market rules, but how much action has there been? Are we going to repeat 1929 before the gawky, timid twits act? Im not taking from ignorance-I have a good degree sub majoring in accounting from a top rung business Uni. There is no reason other than these ridiculous rules that the retail shopping property trusts should have this problem. Suggestion. Set up a new trust from issue to existing holders to "buy" the properties in question and thus solve the problem.
AEZ Price at posting:
4.7¢ Sentiment: None Disclosure: Held
