In late December 2013 ASIC released findings on its review of financial reports of listed entities (and other public interest entities) for the financial year ending 30 June 2013. In its review ASIC made enquiries of 100 entities with the majority relating to impairment and valuation of assets. Other concerns included:
- Inadequate disclosure of a business model and business strategies relevant to the entity’s financial position and performance.
- The use of a discounted future cash methodology for determining a fair value assessment of the recoverable amount of assets. This related to circumstances where there is limited basis for determining what a fair value may be for a sale of the asset in an arms’ length transaction.
- Inadequate disclosure of sensitivity analysis and key assumptions applied to asset valuations, including assumed discount and growth rates.
- The treatment of mine stripping costs for producers.