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Report Responds To Wharton



Editors note: The following is correspondence between Charles Wharton and Christy Parson. Parsons response letter follows Wharton's original letter.

January 3, 2007



Christy Howard Parsons
The Walking Horse Report
730 Madison Street
Shelbyville TN  37160

Dear Christy,

I want to clarify information in the December 11, 2006 Walking Horse Report.

You reported in the section titled TWHBEA Committee Reports that the financial information for the eleven months ended October 31, 2006 were misleading because “in the Admin/Fiscal Committee Meeting on Friday, it was explained that approximately $300,000 related to the National Walking Horse Association lawsuit and $100,000 related to the HIO Sanctioning Plan and HIO organization and development had been capitalized as assets to be amortized on the financials.”

You are correct in that that information was disclosed on Friday.  It was also disclosed at the Saturday morning members meeting, where all Committee reports are given, on the third slide of my presentation.  These items were capitalized in order to comply with general accepted accounting principles.  To characterize our financial reporting as misleading is incorrect.  Focusing on any line item in isolation might result in the reader reaching an inaccurate conclusion.  To avoid that, financial reports should be viewed in their totality.  As a matter of policy, we try to provide the significant detail behind reported revenue, expense and capital expenditures.

With respect to questions about the NWHA lawsuit, it is not appropriate for me to comment about current litigation in a public forum.  Our Counsel was at the meeting and had they had information appropriate for disclosure, I believe they would have made such disclosure.

Because there is a possibility of litigation with respect to damage to TWHBEA’s building in Lewisburg, I again thought it was inappropriate for me to comment.

Thank you for the opportunity to share this information with you.

Sincerely,


Charles E. Wharton
Vice President Administrative/Fiscal/Audit
Tennessee Walking Horse Breeders’ and Exhibitors’ Association

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January 9, 2007

Charles E. Wharton
Tennessee Walking Horse Breeders and Exhibitors Association
P.O. Box
Lewisburg, TN  37091

Dear Charles:
           
            I appreciate your letter of January 3, 2007, and wanted to further clarify my comments in the Walking Horse Report.
            As a former certified public accountant, I agree that capitalizing the expenses related to the formation of the new horse industry organization and the expenses relative to a trademark lawsuit should be capitalized.
            However, most people do not understand generally accepted accounting practices, and they might not understand that $400,000 can go out the door without affecting the bottom line by $400,000. If they were given a statement of cash flows included in a full financial statement, along with the notes to those financial statements, then the information would be much more clear.
            I requested that information from Kristi Lane for inclusion in that issue of the Report, but was told that you were not willing to release that information.
            My job as a journalist is to assist the general public, and the horse industry specifically, to understand what is happening at the Tennessee Walking Horse Breeders and Exhibitors Association. Excessive executive sessions in meetings I attend and denied requests for information make that job exceedingly difficult.
            I apologize if my use of the word “misleading” was offensive, but I stand by my position that TWHBEA should be more direct with its members about its actions and their financial impact.

                                               
Sincerely,


Christy Parsons
Publisher
Walking Horse Report

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