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Hucksters could use IAS 41 to confuse – why do some LPs use IAS 41 and others do not? Some use the Gross Profit treatment to confuse. Have you not heard/seen adverse comments about LPs with no sales show Gross Profit due to IAS 41? Yes, that can happen during a first harvest etc – no different than year-1 of the Pharmaceutical
company that grows its plants to be used in its own drug formulations. You may have seen on various forums some silly terms and words used to discredit these globally adopted Accounting principles. This may rattle the average person and the average person in this industry may be an investor, a patient, a potential recreational customer, or someone just seeking to learn more – following is a current example.
Right on que - on the heels of a recent issuance of a company’s reported financials did a piece surface on Seeking Alpha (SA). Let’s refer to that company as the “target company”. Based on its title and introduction, the piece seems to present itself to be about IAS 41 and the valuation of cannabis industry biological assets. Before long the piece possibly transitions into what some may see as using inauspicious references relating to the target company. The sources may appear to not be fully arms-length to one another and are not meaningful general discussions around IAS 41 such as an unbiased review of broad aspects relating to the valuation of biological assets. What may be seen as a truly bizarre aspect of the SA piece is that it appears to refer to its sources as not-credible, flawed, and absurd (by referring to its sources as “incredible”).
Perhaps the piece’s author did not understand what the word “incredible” meant in which case what else was not understood by the author? It is also possible that the piece is an attempt at satire. Regardless, as the cliché goes – all roads lead to Rome. The share price of the target company rose from the time the piece appeared through to the closing price the day this was written (July 13) - did investors give the piece the attention and value it deserved?