ASIC notes the decision by ASX-listed Astivita (ASX code: AIR) Limited (Astivita) to write down $4.2 million of deferred tax assets and record an impairment charge of $449,000 for its New Zealand brand name in its financial report for the half-year ended 31 December 2019.
ASIC had raised concerns with Astivita’s assessment of the recoverability of its deferred tax assets and the impairment testing of the brand name for the year ended 30 June 2019.
As outlined in ASIC media release 19-341MR Financial reporting focuses for 31 December 2019, tax accounting and asset values remain focus areas for financial reporting at 31 December 2019.
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 also apply appropriate experience and expertise to financial reporting, including complex accounting areas such as recoverability and impairment of assets.