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Yongye International, AŞ Message Board

  • waldoa Mar 20, 2013 1:18 PM Flag

    Well-placed YONG sources say crux of matter is whether KPMG will sign off on high 2012 year-end bad debt reserve

    I spoke with several well-placed YONG sources in last couple days. The crux of the matter appears to be continuing active discussions between YONG management and KPMG on 2012 year-end bad debt reserve amount on which KPMG will sign off in the 2012 audit.

    Specifically, YONG management's preferred 2012 year-end reserve balance implicit in the guidance of last Friday's Form NT 10-K for 2012 full-year results of approximately 14% revenue growth and 10% net income growth reflect a 2012 year-end bad debt reserve that is materially higher than KPMG are willing to sign off on in the 2012 audit given KPMG's exposure to litigation on this in the U.S. the probability of which is very high given the pending well-financed going private transaction. In short, the 2012 financial results on which KPMG is willing to sign off for the 2012 audit are materially better than those reported in last Friday's Form NT 10-K filed by YONG management.

    Sentiment: Buy

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