Christina Kim Sues JoongAng Sunday

In other “cry me a f***ing river news:

March 12 (Bloomberg) — Bernard Madoff, who pleaded guilty today to masterminding the largest Ponzi scheme in history, may have to fight off prison inmates who want to squeeze him for money or blame him for the Wall Street crash.

Here’s a little something just for the late-night KorAm readers. I’ve removed it from Kia’s annual report this year (I couldn’t find the phrase on Google, so I figured it wasn’t too late to contain the damage)

We have done our best in social contribution activities and boosting the corporate image. For instance, we raised funds by waging a campaign to save the national sovereignty over the contentious Dokdo islets under ‘We Love Kia. We Love Korea.’

then approach from the rear

Sorry. Wide loads interfere with my ability to focus. And I’ve slept precious little in the past 5 days.

Google Images. No time at all. All three thumbnails were on the first page of search results.

Hey Kamloops, you know John and Eun-hee? Is there a Kamloops club of former teachers and Korean brides that gets together at kimchi-making time?

There’s no GAAP here but the Korean GAAP. Here’s another one that’s even better. A few pages on I found out that they capitalize building maintenance. Can you f**king imagine?? The money you spend on the cleaning lady being wiped off your expenses and instead being turned into a tangible property asset, as if the emptiness of that trash can beside your desk were a corporate value to be slowly written off over 20 years.

But, on the other hand, at least they’re telling us what they’re doing. The due diligence files on unlisted companies that I have seen would make your face fall off.

Moot question. Earnings don’t matter here. All spending gets transferred to the balance sheet. What’s Kia’s doing is relatively sophisticated. Most companies just keep adding to retained earnings, which often is 80% of equity, or more. It’s not cash, though, because the cash was spent. They have to hold it as RE because there’s no cash left. Dividend payouts are miniscule.

Another thing that happens to earnings is that they go to buying up shares in other companies. If it’s more than 20% they’re supposed to recognzie gains/losses each year under the equity method, but often those companies themselves aren’t listed, to these gains/losses aren’t verifiable because there’s no way to independently verify the value of the invested company. Add that to the fact that the chaebol every few years completely destroy their organizational structures, dissolving and reforming their subsidiaries, and the financial statements mean pretty much nothing.

Buying a Korean stock is pure gambling. You can only make money if other investors bid up the stock for some reason, and then you sold it. You CANNOT make money here on the organic growth of the company whose stock you bought – because the owners won’t share it with you.

Oh, and net income is definitely affected. You can’t really lie about your top-line revenues. But by capitalizing expenses, you can book paper earnings even though you’ve burned the cash. You just have to then move those earnings into retained earnings each year, inflating the asset value of your company, becuase you don’t have any cash in the bank to pay out in dividends.

Yep, any Korean company listed in the US has US GAAP reports on EDGAR, as I assume is required by law. But as dogbertt says, they keep two sets of books, one KGAAP and one USGAAP. All that gets disseminated in Korea is the first, and even then it’s almost always just the nonconsolidated. Also, Kia hasn’t hired me directly, or I wouldn’t be mocking them. They hired a design company to produce their AR, one which incidentally thinks my translation prices are too high, so they used their own translator and just sent it to me for editing.