ob体育 notes the decision by PS&C Limited [ASX code: PSZ] to impair goodwill by $50聽million聽in its financial report for year ended 30 June 2019.
ob体育 had raised concerns on PS&C鈥檚 impairment assessment of the goodwill as at 30 June 2018. ob体育 questioned the reasonableness and supportability of free cash flow forecasts used in goodwill impairment testing, having regard to historical performance and market conditions.聽
As outlined in ob体育 media release 19-143MR Major financial reporting changes and other focuses, impairment testing and asset values remain a focus area for financial reporting at 30 June 2019.
Directors are primarily responsible for the quality of an entity鈥檚 financial report. This includes ensuring that management produces quality financial information on a timely basis. Companies must have appropriate processes, records and analysis to support information in the financial report.
Companies should apply appropriate experience and expertise, particularly in more difficult and complex areas such as accounting estimates including impairment of non-financial assets.