via RogueEconomist.blogspot - Dissapearing Liability

The RogueEconomist discusses disappearing liabilities on the pro forma balance sheets of corporations.

In the case of GBN.V, we have the case of the disappearing revenue, which is quite the opposite. The revenue that the company is attempting to hide - and quite successfully have investors seize upon the liabilities' column first and foremost as their greatest risk - are the actual revenues.

What it might represent is the staggering cost of the two tranches of revenue-based and asset-based financing. The company has $110m. as revenue counted as liabilities, but they may be producing $220m. in gold for their counter-party.

The asset-based financing is off balance sheet, thus nothing from this tranche appears on the balance sheet at all. But the asset-based tranche must have been completed in order to cover the costs of five years of operations. Operational costs are written off as borrowings quarterly as if they borrowed from their subcontractors. But they are really 'borrowing from the borrowing' or 'borrowing from the financing'

Of course, for all of this to be legal, a write-down must occur. The only really fraudulent aspect of the balance sheet are statements of going concern. They are intentionally misleading.

http://rogueeconomistrants.blogspot.ca/2008/07/great-disappearing-liability-mother-of.html

-F6