ASIC’s crackdown on balance sheet asset values continues with a 5th company revealed to have been forced to impair valuable assets, this time physical property, plant and equipment instead of intangibles such as goodwill.
A total of more than $750 million in losses has now been notched up by companies responding to ASIC pressure to impair asset values in their balance sheets.
It is an attack by ASIC that has no precedence.
ASIC said in a statement posted on its website yesterday that it “notes the decision by MMA Offshore Limited (MMA Offshore) to write down property, plant and equipment relating to the Vessels business by $254 million in its financial report for the half-year ended 31 December 2016.
"ASIC reviewed MMA Offshore’s 30 June 2016 financial report as part of its ongoing financial reporting surveillance program. ASIC raised concerns regarding the value of property, plant and equipment relating to the Vessels business.”
This means that MMA joins Spotless ($99 Million), Seven West Media ($75 plus million), Nine Entertainment ($260 million) and Pacific Star Network ($4.5 million)
On a statement posted on its website on Monday, ASIC said it “notes the decision by Spotless Group Holdings Limited (Spotless) to write down goodwill relating to its Resources business by $99.2 million in its financial report for the half-year ended 31 December 2016. ASIC had raised questions in relation to the recoverable amount of the goodwill relating to the Resources business in Spotless’ financial report for the year ended 30 June 2016.
Spotless made a loss of $358 million in the December half, partly due to $391 million in impairments, in the results announced on February 28.
MMA recorded a further non-cash impairment charge against the value of its assets of $278.3 million as at December 31. From what ASIC said, $254 million of that figure related to its pressure on the MMA board.
Excluding the impact of the impairment charge, MMA recorded a net loss after tax of $(45.4) million down from a profit of $6.5m for the first half of six months to December, 2015. The reported net loss after tax was $(323.7) million including the impact of the impairment charge.
MMA shares rose 2.2% (half a cent) to 23 cents yesterday.
