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  1. #14001
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    I am more curious about if HGH will have any sentiment to sell its shares once the escrow restrictions expire.
    Selling the shares would increase HGH's capital reserve to meet the future capital requirement.

  2. #14002
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    Quote Originally Posted by zs_cecil View Post
    I am more curious about if HGH will have any sentiment to sell its shares once the escrow restrictions expire.
    Selling the shares would increase HGH's capital reserve to meet the future capital requirement.

    ....or go a long way to funding a divie.
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  3. #14003
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    Quote Originally Posted by King1212 View Post
    Revaluation of HGH..will see sp will also be re rated
    What you mean is that the listing of Harmoney may cause a re-rating of the holding price of the Heartland 8.44% stake in Harmoney.

    https://www.nzx.com/announcements/363561

    You would be right but it would be a one off profit boost. If the share price went down in the months following there would be a one off profit loss. So I don't think HGH can use that Harmoney stake as a source of equity to lend against from a Reserve Bank oversight stance. And I don't think HGH could pay a dividend as a result of any such capital gain either. (unless of course the Harmoney stake was sold),

    SNOOPY
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  4. #14004
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    I must be out of date with the very latest rocket science IFRS accounting standards. It seems weird to me that just because the shares they own in another company have gone up they are reporting that as part of their realised profit for the year ? Dumb out of date crusty old suburban bean counter I am. All my training was a profit cannot be reported as such until it is real profit, i.e. realised.

    This modern approach of counting profits (while something is in escrow and cannot be sold) is lost on me. IFRS16 accounting for leases another "fine" example that makes me wonder if the academic accounting boffins in Brussels or Switzerland or wherever they promulgate their latest idea's, haven't got enough to do ? Maybe its time to retire and forget about all this stupid nonsense...

    Lending money unsecured to people heading into a Covid deep recession based on a whole bunch of assumptions they probably dredged up from GFC days and loaded onto a digital platform also seems like a situation where it surely begs the question, what could possibly go wrong

    Thankfully there's the old fashioned reverse equity loans that are simple to understand, have very good net interest margins and you're lending money to people that will definitely pay it back from their estate. Best part of HGH's business model by a VERY VERY long way and easily understandable !!
    Last edited by Beagle; 20-11-2020 at 11:44 AM.
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
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  5. #14005
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    Pleasing noting discussion on HGH's gain on purchase price of their stake in Harmoney.
    Bet we all would have a lot more to say had they lost money on the investment..lol.

  6. #14006
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    It is the same thing as property revaluation.

  7. #14007
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    Quote Originally Posted by Beagle View Post
    I must be out of date with the very latest rocket science IFRS accounting standards. It seems weird to me that just because the shares they own in another company have gone up they are reporting that as part of their realised profit for the year ? Dumb out of date crusty old suburban bean counter I am. All my training was a profit cannot be reported as such until it is real profit, i.e. realised.

    This modern approach of counting profits (while something is in escrow and cannot be sold) is lost on me. IFRS16 accounting for leases makes me wonder if the academic accounting boffins in Zurich or wherever they promulgate their latest idea's haven't got enough to do ? Maybe its time to retire and forget about all this stupid nonsense...
    Agree there's some silly results from IRFS16, but this just looks to be applying the long standing idea of mark to market with a twist because they can't sell yet.

  8. #14008
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    Quote Originally Posted by Beagle View Post
    I must be out of date with the very latest rocket science IFRS accounting standards. It seems weird to me that just because the shares they own in another company have gone up they are reporting that as part of their realised profit for the year ? Dumb out of date crusty old suburban bean counter I am. All my training was a profit cannot be reported as such until it is real profit, i.e. realised.
    At 8.44%, the Heartland Harmoney stake is an unconsolidated investment. There has been no open market for Harmoney shares. Now there is. So whatever book value the Heartland stake had, there is now a measuring stick to compare it to. Therefore any difference between the book value of the Harmoney stake and the market value of the Harmoney stake must be reported as profit by Heartland for this half year. This is the reason behind the 'profit upgrade' announcement that Heartland made to the market today. As you note though, it is not a realised profit and in my view any such profit should be ignored as a one off.

    I am surprised you bring up the subject of 'realised profit' at Heartland though. The vast majority of those reverse home equity profits are unrealised. If you discounted unrealised profits, you wouldn't want to be on the Heartland share register I would have thought!

    SNOOPY
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  9. #14009
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    Quote Originally Posted by Snoopy View Post
    At 8.44%, the Heartland Harmoney stake is an unconsolidated investment. There has been no open market for Harmoney shares. Now there is. So whatever book value the Heartland stake had, there is now a measuring stick to compare it to. Therefore any difference between the book value of the Harmoney stake and the market value of the Harmoney stake must be reported as profit by Heartland for this half year. This is the reason behind the 'profit upgrade' announcement that Heartland made to the market today. As you note though, it is not a realised profit and in my view any such profit should be ignored as a one off.

    I am surprised you bring up the subject of 'realised profit' at Heartland though. The vast majority of those reverse home equity profits are unrealised. If you discounted unrealised profits, you wouldn't want to be on the Heartland share register I would have thought!

    SNOOPY
    Snoops me ol mate I think we both know you're just pulling my leg (paw ?). Accounting for accrued interest validly charged on loan contracts on reverse interest mortgage with a certain end game outcome and much more predictable house price values is a very different thing that accounting for theoretical gains on fintech companies with shares in escrow. Still, a theoretical gain is a gain that theoretically might need to be revalued again one way or the other and if they want to count some valuation they dream up as income in the meantime good for them. Like you suggested, I am going to simply ignore it as a one-off or maybe offset some of it against possible under provisioning for Covid. Before you do more than just pull my paw, I would hasten to add that I did buy some more this week
    Last edited by Beagle; 20-11-2020 at 05:48 PM.
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  10. #14010
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    So retirement (property) companies can take asset revaluations through the P&L but Heartland can't?

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