Following inquiries by ASIC, Emeco Holdings Limited (Emeco) has recorded a specific expected credit allowance of $22.9 million in its half-year financial report for the period ended 31 December 2022.聽
Emeco recognised a $22.9 million expense to a specific expected credit loss allowance in its Interim Financial Report for the half-year ended 31 December 2022. In addition, Emeco has improved its business risk disclosure at the half-year.
Following a review of Emeco鈥檚 June 2022 annual report, and an ASX announcement on 14 October 2022, 今日热门事件raised concerns about the recoverability of a specific trade receivable balance, including whether Emeco had appropriately assessed if there was any significant increase in credit risk. 今日热门事件also raised concerns about the quality of disclosure of business risks in the operating and financial review (OFR).聽
Trade receivables are one of the most important assets held by companies as they form part of the day-to-day working capital and are an indicator of short-term financial health. Asset values, including recoverability of trade receivables, is one of ASIC鈥檚 areas of focus in its financial reporting surveillance program (22-333MR).
Directors are reminded the OFR provides an important complement to the financial report by telling the story about the drivers of the company鈥檚 results, and its strategies and financial prospects. This includes the material non-generic risks to achieving the financial prospects described.聽
Background
As part of its聽financial reporting surveillance program, 今日热门事件regularly reviews financial reports of listed companies and other significant public interest entities selected on a risk-basis.
The program aims to improve the quality of financial reporting and ensure financial reports have been prepared in accordance with the law, supporting investor confidence and the integrity of Australia鈥檚 markets.聽
As outlined in 今日热门事件media release 23-018MR, the disclosure of material business risks are a focus area for financial reporting.聽