POST RV ADVICE FROM FLASHING (Copied From Past Chats)
flashing: Good morning. I will give you some recommendation that may be helpful during your investment process after rv (imo).
However you should make your own research and exercise your own judgement on these matters. So these are just some tips which in my opinion could be helpful. The final decision is yours.
1. Ask for the audited financial statements of the bank, insurance or other institution in which you will deposit or make a significant investment.
2. Read the Auditors Opinion in order to determine if the institution got an unqualified opinion. Below i posted the different kind of opinions that an auditor may issue.
3. Read the notes to financial statements and pay attention to "Risks" disclosures , litigation notes or any other relevant item disclosed on such notes. Below i posted some of the risks that you must be alert of.
4. Use the advice of Professionals with excellent reputation and background in their fields.
IMO YOU SHOULD AVOID ANY KIND OF ADVICE FROM PEOPLE FROM CHAT ROOMS WHO HAVE NO EXPERTISE IN SUCH FIELDS . THERE ARE A LOT OF PREDATORS OUT THERE WITH FRIENDLY CHAT ROOM IDENTITIES.
5. Tax Matters- Use Professionals such as the Big CPA International Firms. They have expertise and are supposed to have adequate insurance policies too.
6. Use professional advisors during this exchange process. Also use them during the investment process once you make the currency exchange.
7. Get advice on the property taxes and other maintenance costs associated with real estate investments; Particularly with those properties with a significant value. Sometimes people buy mansions and then they are unable to pay their property taxes and maintenance costs.
8. Diversify the risk among different companies as much as you can.
9. Please take all the security measures discussed previously with you in previous months. It includes security measures during, before and after the currency exchange .
10. Please help our Nation to be a productive one as was in the past. So teach your relatives how to fish.
God Bless You All and please take a look to the information below.
What is an audit opinion?
An audit opinion is expressed on audited statements. It is required that an auditor state in the opinion that generally accepted accounting principles have been followed that they have been applied on a basis consistent with that used the preceding year.
Types of Audit Opinions
Unqualified opinion — The unqualified opinion has no reservations concerning the financial statements. This is also known as a clean opinion meaning that the financial statements appear to be presented fairly.
Qualified opinion — This means that the auditor has taken exception to certain current-period accounting applications or is unable to establish the potential outcome of a material uncertainty.
Disclaimer opinion — This is a special type of audit report that should be issued when the auditor permits his or her name to be associated with financial statements that were not examined in accordance with generally accepted auditing standards.
Adverse opinion — This is a type of audit opinion which states that the financial statements do not fairly present the financial position, results of operations, and changes in financial position, in conformity with generally accepted accounting principles.
Credit risk disclosures relate to the risk of non-payment or non-performance of financial instruments. These credit risk disclosures principally require the provision of maximum credit exposure, impairments and collateral information. Monitoring credit risk is important for investors as it is an integral category of risk, especially for financial institutions.
Importance of Risk Disclosures
The importance of financial instrument disclosures as a means of helping users to understand the risks associated with on- and off-balance sheet items have been accentuated during both the ongoing sovereign debt crisis and the 2007-09 market crisis.
These crises have highlighted the interconnectedness which exists between the state of the economy and several key financial risk exposures such as credit, liquidity and market risk.
At the same time, there is often limited transparency for users regarding these risk exposures and how they are managed by reporting entities.
The limited transparency regarding these risk exposures contributes to the mispricing of risk and misallocation of capital, and abates investors‟ ability to provide market discipline on a timely basis. This limited transparency also contributes to the disorderly capital market correction in the valuation of companies during crisis periods.
In a broader sense, across the full economic cycle, high quality financial instrument risk disclosures can assist in informing users regarding:
Financial instrument measurement uncertainty, including the sensitivity of reported values to inputs and assumptions, and the explanation of period-to-period movements; and
Forward-looking financial risk information that has a bearing on enterprise risk.
Risk disclosures have the potential to inform investors regarding a reporting entity‟s risk profile regardless of the measurement basis (i.e. fair value or amortized cost) applied.
The following questions may assist in the evaluation of risk disclosures:
Do investors understand the risk disclosures?
Are risk disclosures important for investors?
How do investors use risk disclosures in making investment decisions?
How satisfied are investors with risk disclosures?
How discrete will, or do, the risk disclosures need to be?
What has been the quality and compliance with mandated risk disclosures under IFRS 7?
To what extent are other useful related risk disclosures provided voluntarily?
How can these risk disclosures be improved?
Liquidity Risk Disclosure
Liquidity risk disclosure helps me to try and create a scenario of how the company will manage their liquidity and where challenges might arise from in the future.
liquidity risk = as the risk that an entity will encounter difficulties in meeting obligations arising from the settlement of financial liabilities through the delivery of cash or another financial asset.
Funding liquidity risk is the current or prospective risk arising from an institution‟s inability to meet its liabilities and obligations as they come due without incurring unacceptable losses. Funding liquidity risk also arises because of the possibility that the entity will be required to pay its financial liabilities earlier than expected.
Asset liquidity risk, or market/product liquidity risk, is the risk that a position cannot easily be unwound or offset at short notice without significantly influencing the market price because of inadequate market depth or market disruption.
Asset liquidity risk has a bearing on funding liquidity risk. For example, when highly liquid financial assets are held, entities are more likely to consider funding these instruments through short-term funding instruments such as commercial paper.