ASIC notes the decision by THC Global Group Limited (THC) to impair its goodwill and intangible assets by $1.95 million in its financial report for the half-year ended 30 June 2019.

ASIC inquired about the impairment assessment of non-current assets in THC’s financial report for the year ended 31 December 2018. THC is required to test cash-generating units with goodwill for impairment and disclose related information for each cash-generating unit with goodwill.

As outlined in ASIC media release 19-143MR Major financial reporting changes and other focuses, impairment testing and asset values remain focus areas for financial reporting at 30 June 2019.

Directors are primarily responsible for the quality of an entity’s financial report. This includes ensuring that management produces quality financial information on a timely basis. Companies must have appropriate processes, records and analysis to support information in the financial report.

Companies should also apply appropriate experience and expertise to financial reporting, and to the processes and analyses supporting the information in the financial report. This is particularly important for potentially complex areas such as assessing impairment of non-financial assets.