It is included in the accumulated Disbursement Funding debt (ie...

It is included in the accumulated Disbursement Funding debt (ie the liability is reflected), but it would appear that the interest expense is being included in the Unbilled Disbursements on the basis it would be recovered. You can see this in the difference between interest accrued for the year in the liability vs the amount of interest expensed. The portion of interest going into Unbilled Disbursements should be subject to Impairment testing.




How material a write off of this would be is unknown as it depends on what has been expensed directly and what has been expensed as impairment on unbilled disbursements, and therefore what the carrying value is. Note 4(c) shows the impairment overall, obviously not matter specific:



The other thing to bear in mind is that Shine runs a fairly hefty provision against its WIP. This was where it ran into trouble previously (after SGH hit problems). It was recording a very high percentage of gross WIP in its accounts. Now the numbers are:




ie Gross WIP at 30/6/2021 was $371,076,000 with a provision of 19.34%, at 30/6/2022 it was $402,949,000 with a provision of 17.49%. Some matter types will have a very low provision as there is little variability or uncertainty. No win no fee matters will have a higher than average provision. So while we know the fees that Shine have claimed for Ethicon and Boston, we don;t know what WIP they are carrying after provision. If they get all the fees but lose out on the interest it's likely there would be an onffset from a write back on that provisioning.