Ann: Recording of Investor Call Available, page-11

Not yet. Im just talking about what i know about impairment and writeoffs.

I will give you an example. In the company i worked for, impairment was assessed on a CGU basis and some cgus were at risk of being impaired due to not making any money (losses). In normal times (e.g. not so much scrutiny on auditors), they would let us carry the asset value for a few years even though the cgu has made losses for the past few years. This was because the company kept arguing there was a turnaround strategy, management changes, external factors, capex planned etc - these arguments kept the auditors happy.

But in times of huge scrutiny such as last year (noticed how all big businesses wrote off huge amounts in fy17? Because all auditors were under immense pressure from asic to do the right thing) we had to write them off completely. And justifiably so. Our senior management still thought they were worth something something even though the cgu has made losses for the last 5 years.

And usually when one impairment is required, senior management would push for all potential impairments to be booked, because you dont want impairments every year, you would rather have one big one in a single year. But guess what the auditor did? Thats right - only allow partial impairments to the extent the fair value model indicates for certain CGUs. So in my mind there is no way the auditor would allow booking future liabilities unless the management has convinced them somehow - and the only way to convince them is to show them how bad it is performing.

Back to Cm8, i would take the managements words with s grain of salt. How a stablising track became a disaster is beyond me.