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Olympus Corporation Message Board

  • jantrou jantrou Nov 11, 2011 2:34 PM Flag

    Olympus to restate earnings upwards

    Yes it's true. There is a lot of bullshit being said about Olympus right now. Yet it is quite clear what happened now and thus what will happen.

    Forget the bullshit about 20 years. The losses are 20 years old. But it was perfectly legal to not write off the value of the investments up to the year 2000. Then the illegal stuff happened, but only for the year 2001. Olympus will have to restate 2001 earnings and write off up to $1.3-$1.6bn (take a look at the 2001 balance sheet marketable securities & investments to get the max. figure).

    But the implication is that Olympus will have to eliminate the illegal transactions in 2007/2008/2009. The earnings of all those years will be restated higher, again >$1-1.3 bn

    Only the balance sheets of 2001-2011 will have to be adapted. The Axam payment resulted in more than $600 goodwill that are supposed to be written off. Once the losses are recognized in 2001, 2007/8/9 earnings are restated upwards and the Axam payment is in the books at the real value (a couple of dozen millions max) the corrected balance sheet will have no $600 axam goodwill position, so nothing to write off.

    So recent news are quite positive to anyone being able to read a balance sheet. The only downside is: What value will Olympus remaining investment positions have? Max. write off <$600 mio.

    Remember: the only balance sheet positions Olympus manipulated are either marketable securities in current assets or investment securities. And the max. size is right there in the balance sheets.

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    • can you expand on this?

      how about the Gyrus acquisition, and the three domestic acquisitions; Humalabo, News Chef etc?

      shouldn't they have a tax loss carryforward if they lost money on investments

      they didn't over/understate their revenues etc right?

      can you kindly spell out all the numbers you're aware of so far in bullet-point format?

      • 1 Reply to overrated_author
      • 1. Up to 2000 losses of unknown size, yet balancing of books perfectly legal
        2. Annual Report 2001 (google for it, still online at olympus):
        Marketable securities 36.483 bn yen
        Investment securities 102.598 bn yen
        Losses must be hidden in these positions, so max. 100% loss 139.081 bn yen

        So Olympus will have to restate 2001 with extraordinary loss of up to additional 139.081 bn yen.

        That's all there is in negative corrections.

        Then just undo the fake takeovers of Altis, Humalabo, News Chef. 73.4 bn yen, probably 80% of the amounts were fake. So ca 58.7 bn more cash flow between 2006-2008

        Undo the 80% writeoff as those amounts were fake. So 58.7 bn more earnings in 2008.

        Undo the $687 mio fake payment to axes/axam in 2009. Let's assume $650 were fake. So $650 mio more cash flow in 2009. No goodwill position for that $650 mio (52 bn yen). No need to write off the goodwill position as it came to the balance sheet only due to the fake accounting.

        Adapt everything for tax implications and the balance sheets for every year and everything is clean.

        Oh I forgot one thing: you also have to revert the sale of the securities. Olympus must have done a fake sell of the worthless securities at 139.081 bn. If written off in 2001 you can't sell them anymore.

        It's all there in the annual reports of 2001-2011.

        In the end there are up to 139.081 bn yen losses previously unknown to shareholders. Yet there are 58.7bn more earnings in 2008. And 52 bn yen less goodwill to be written off, so 52 bn yen more future earnings.

        Without considering tax implications the net "surprise" loss previously unknown to shareholders is max. below 40 bn yen.

    • You may be right but I have a sneaking suspicion we haven't heard the last of the bad news. DJ Newswire today says they have 100 subsidiaries that are in the red. These have all been added by Kookookawa since 2001. Either he was a horrible acquirer or he did the Bernie Ebbers jig - constantly acquiring to cover up fraud.

      As for balance sheets, most analysts thought Worldcom's and Enron's were crystal clear.

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