Ann: Response to ASX Query - Half Year Accounts, page-9

A robust, well thought out response, the keyelements of which are:

-       PNC followed due process indetermining what they believe to be the correct accounting treatment under AASB9

-       PNC has kept the appropriate partiesinformed at all times

-       PWC has initially agreed to theaccounting treatment to be used (December 2017)

 

In my view PWC are probably re-thinking thevalidity of the approach, given that some of PNC’s competitors are using adifferent accounting treatment.  If theybelieve that there is no difference between PNC’s asset (PDPs) and similar typeassets held by other industry players then PWC are not going to be keen to buckthe trend by signing-off on a different accounting treatment. 

 

In order to retain their position I believePNC will have to provide a compelling case that their asset is completelydifferent to that of their competitors.

 

PNC have put forward a strong case, butthat’s no guarantee they will win the argument. However, the big unknown, if they lose, is what amortisation would do tothe bottom line (all three scenarios: up, down and no change, appear possible).

Interesting times ahead