• House Lannister’s Balance Sheet (Unaudited) Isn’t Looking So Hot

    By | April 29, 2016

    On April 24th, Game of Thrones premiered its 6th season on HBO and fantasy literature nerds everywhere shook their fists in the air at George R.R. Martin.

    For those of you who imagine me to be a duplicitous ‎villain not worthy of the Mother’s mercy, you won’t be surprised to learn that House Lannister is where my loyalties lie. I don’t have time to get into it here, so save your breath.

    What we will get into is this House of Lannister Balance Sheet and its footnotes that was compiled by FloQast. This is the first financial statement that I’ve seen out of Westeros and since House Lannister is the wealthiest (some say otherwise), it seems like a good place to start as any, even if it’s only a compilation. Take a gander:

    As you can see, House Lannister’s financial position is looking pretty dire. There’s liquidity trouble, monster debt and cratering equity. It’s a classic story of everything going wrong all at once. The gold mines are not producing like they once were so naturally, there’s less gold on hand. The lack of mining production has also resulted in a hefty write-down of their property — including gold mines and Casterly Rock — which is explained in Note 9. That’s all made far worse by the Iron Bank of Braavos calling in 10% of the note due, explained further in Note 14.

    And just in case your professional skepticism alarms are screaming at you, FloQast submits quite a bit of evidence for you to use in case you feel like applying some audit procedures:

    For audit purposes, here are many of the facts we used from the show to drive our calculations. Check out the Game of Thrones wiki if you want to go to the next level.

    •     100 Gold Dragons can buy 12 barrels of expensive wine
    •     The Lannisters maintain a 60,000 troop army
    •     Their gold mines once produced a ton of gold and are no longer producing
    •     The Lannisters control large portions of the Westernlands [sic]
    •     In Season 1 we learn the Lord Baratheon is 3M Gold Dragons in debt to the Lannisters
    •     Tyrion Lannister states they owe millions of Gold Dragons to the Iron Bank of Braavos
    •     The Iron Bank has called in 10% of the principal balance
    •     The Lannisters only have enough gold to cover half of the requested payment
    •     The Lannisters say “A Lannister always pays his debts” a lot…

    Personally, I feel like an audit would be a fool’s errand as there would certainly be a scope limitation on a lot of the Lannister assets. However, considering the obsession level that some have with the show, there may be enough evidence to provide some level of assurance. A review, perhaps? 

    In any case, who’s to say they won’t turn things around? It’s only one new gold mine away from a serious windfall of liquidity. But also, by the end of Season 4, it’s clear that Tommen Baratheon — son of Cersei and grandson of Tywin Lannister — will wed Margaery of House Tyrell. I’d think that that this would be disclosed as a subsequent event, however, there’s no guarantee that the Lannisters will be able to tap into the Tyrell’s vast wealth, so perhaps they opted for a conservative presentation here.

    In any case, I’m sure some of you will have opinions and analysis on this. Enjoy.

    [FloQast]

    Earlier:
    Here's Your Authoritative Guide for Likening Game of Thrones to Public Accounting

    • James Ulvog

      Keep in mind a review consists of inquiry and analytical review. An onsite visit is not required.

      I just published a leaked email that I received from a firm that is thinking of submitting a proposal for the review:
      https://attestationupdate.com/2016/04/29/proposal-to-review-house-of-lannister-financial-statements/

    • verda

      Something is definitely fishy with intangible assets. Suggest impairment testing.

      • KM

        Death of Tywin Lannister is definitely a triggering event.

    • Jeff S

      No going concern paragraph in the compilation report or going concern footnote? What type of shoddy work is this? Someone should report that firm to the Master of Coin.

    • Elcontable

      “The saying “A Lannister Always Pays His Debts” is valued at $4B”… I think that this goodwill should be tested for impairment

    • AaronBalake

      I hate whoever actually took the time out to do this.

      • Mose Schrute

        This site needs more gossipy posts like the great Rothstein Kass post and ensuing comment thread

      • PWC Prick

        I believe AaronBalake entered the Going Concern commenter’s Hall of Fame during the Rothstein Kass thread…

        • AaronBalake

          That was like 2 years ago. What amazing thing did I comment?

          • PWC Prick

            AaronBalake ReasonabIe Assurance • 2 years ago

            I am everyone’s hero here.

            AaronBalake dominationcentral • 2 years ago
            someone’s butt hurts.

            AaronBalake N.E.R.D. • 2 years ago
            i saw this stupid fat cat twice and laughed my ass off both times. Unfortunately the second time I was in a meeting and everyone thought I was on crack

            • AaronBalake

              Now I see. What ever happened to Chipman? Guy who always commented about Grant Thronton. Miss that dude.

            • PWC Prick

              Chipman69 is still around. I think he commented on the last GT article.

            • Chipman69

              I’m still here – making DYNAMIC comments whenever GT is featured penetrating a new CHOSEN MARKET with their INSTINCT FOR GROWTH and WHOLE SELVES!!! Do you recall that I was banned for a short period of time by Ms. Gonzalez for the DYNAMIC comments I made during the infamous Rothstein Kass thread? That was hilarious!!!

            • AaronBalake

              oh man, I want to meet this guy and shake his hand.

    • SmallFry

      Given the state of affairs, don’t want to spoil anything, there should be some disclosure regarding the house of Lannister’s ability to continue as a going concern.