Counsel's opinion, page-41

In my time in the industry (1969-1983) we always used the amortised cost method based on historic modelling of cash flow to reduce the carrying value. It was reasonably accurate if there were no unexpected or sudden downturns in the economy within the reporting period. Discounting cash flows were not introduced until an American influence was involved within our company in the later stages of my employment. My views may be a little tainted and primitive but I have discussed fair value methods with people still involved in the industry and I have a personal opinion that there is more latitude for a company to argue about a valuation using that method than with amortised cost method. Of course ultimately both methods can be manipulated by those wanting to skew the figures to create a better picture so we are mostly on the same page. I too would also add that I am commenting in the context of valuations of PDP/PDLs where cash flows are usually highly volatile and cannot necessarily be timed. These comments would not generally apply to companies holding unimpaired loans with consistent repayments.