Talk about injustice!! lets look at in a little more depth as to...

Talk about injustice!! lets look at in a little more depth as to why ASIC wctiond are amiss.

Our December 2011, GCN in its financial statements stated that the financial statements follow the accounting policies in June 2011, and their accounting policies state that the financial statements were prepared in accordance with Australian Accounting Standards that include AASB 136.

Also, their accounting policies Note 1(f) Impairment of Assets of the June 2011 financial statements states that “ … an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use … “

If you read the above and the below and together with today's ASX release, you will understand that GCN does meet accounting standard AASB 136 in respect of paragraph 27 below.

In arriving at their determination, ASIC did not even address the existience of our accounting policy 1(f) in the June 2011 financial statements as stated above and adopted by GCN, which is in keeping with paragraph 27 below and accordingly we are in full compliance with the accounting standard. They incorrectly believe that GCN used only the Value in Use test, which is very wrong. GCN applied both Value in use and Fair Value of Asset test in the preparation of our financial statements. No Doubt GCN will appeal to the AAT and expect ASIC to reverse their determination.

Fair Value less Costs to Sell

25 The best evidence of an asset’s fair value less costs to sell is a price in a binding sale agreement in an arm’s length transaction, adjusted for
incremental costs that would be directly attributable to the disposal of
the asset.

26 If there is no binding sale agreement but an asset is traded in an active market, fair value less costs to sell is the asset’s market price less the costs of disposal. The appropriate market price is usually the current
bid price. When current bid prices are unavailable, the price of the most recent transaction may provide a basis from which to estimate fair value less costs to sell, provided that there has not been a significant change in economic circumstances between the transaction date and
the date as at which the estimate is made.

27 If there is no binding sale agreement or active market for an asset, fair value less costs to sell is based on the best information available to reflect the amount that an entity could obtain, at the end of the reporting period, from the disposal of the asset in an arm’s length
transaction between knowledgeable, willing parties, after deducting the costs of disposal. In determining this amount, an entity considers the outcome of recent transactions for similar assets within the same industry. Fair value less costs to sell does not reflect a forced sale, unless management is compelled to sell immediately.