GN: Its good that you are bringing out this point about classification of costs; it deserves to be addressed. However, I am not as concerned with the classification issue in this instance as you are, for several reasons:
1) Management was forthright in explaining the accounting method,
2) Accounting firms agree with the logic,
3) It doesn't change total costs, ot total revenues, net income,
4) I can adjust the statements on my own to make a comparison,
5) Our job here is to determine, after some time has elapsed, whether
managements methodology has merit. That is, if over the next
two quarters, we see the discount amount being reduced, WE know that management hasn't been feeding us moonbeams. IF after a reasonable time has elapsed and BIDCOM continues to build volume BUT does it at reduced margins, THEN we have to discuss the business plan.
6) As long as we understand where the costs are and what they are, we can understand the statements. |
