ASIC noted the decision by ASX-listed Pacific Star Network Limited (PNW), announced on 28 February, to record an impairment charge of $4.5 million on publishing mastheads and goodwill arising from the acquisition of Morrison Media.

ASIC had previously made enquiries of PNW regarding the carrying value of non-current assets in its 30 June 2016 financial report as part of its financial reporting surveillance program.  We were concerned that the assumptions used in the impairment models for the publishing business were too optimistic.

As outlined in media release 16-428 ASIC calls on preparers to focus on useful and meaningful financial reports, ASIC reminds companies and those involved in preparing and approving financial reports that the assumptions used in impairment models should be supportable and realistically reflect business conditions.