Ann: EPCM Contract Update, page-38

Hi In4apenny,

Thanks for the response. Happy to talk accounting if you want (specifically AASB 116) however I’m not sure our answer lies there.

Now that the Chinese deposit/deferred revenue liability has expired the Karibib ore is unencumbered and LPD could sell to others. Given the recent company update re: selling beneficiated ore and the chat about Namibian restrictions on exporting raw materials I was interested in checking what assets LPD has available to beneficiate ore if required.

Fnqricko suggested LPD could utilise the acquired concentrator to beneficiate ore. I would want that too. Seems practical. It’s also what shareholders paid for.

It’s just that the accounting treatment in FY2020 means that LPD management has already done the following;
- differentiated between book value and value-in-use, and
- assessed that the book value (in this case the fair value on acquisition) exceeded value-in-use, and
- recognized an impairment and written down the book value to match value-in-use i.e. zero, and then
- de-recognized the asset altogether … and it remains de-recognized.

Perhaps the acquired concentrator is now re-recognized, re-commissioned and ready to go … ok great … however that doesn’t seem to match their accounting treatment of that asset. I was therefore thinking I had missed some other piece of news. Would be interested to hear if there is another angle here.

Regards
AM74