ASIC notes the decision by Ainsworth Game Technology Limited (Ainsworth) to write down certain assets in its financial report for the half-year ended 31 December 2020.
Ainsworth reported impairment of non-financial assets of its Latin American business of $23.1 million, an increase in estimated expected credit losses on trade receivables of $6.0 million and $3.4 million in inventory write-downs.
ASIC had raised concerns relating to the recoverable amount of non-financial assets, losses on trade receivables and the net realisable value of inventories in the financial report for the year ended 30 June 2020.
As outlined in ASIC media release 20-325MR, ASIC highlights focus areas for 31 December 2020 financial reports under COVID-19 conditions, asset values are a focus area for financial reporting.
Directors are primarily responsible for the quality of an entity’s 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 of accounting policies and estimates.