http://www.theaustralian.com.au/business
TRADING and mining giant Glencore has been forced into an extra $6 billion of 2013 writedowns on its Australian subsidiary beyond those already booked by the Swiss-based parent company, because of a weak economic environment since taking over Xstrata last year.
On top of this, the company has revealed it has made a $780 million provision for Australian take-or-pay coal mining contracts as coal prices fell.
A hefty $16bn of writedowns, on Australian and overseas assets, reflects the worsening commodities environment in 2013 and current mine plans — factors Glencore was not required to take into account in its London reports filed eight months ago.
In its 2013 accounts filed with the Australian Securities & and Investments Commission this week, Glencore said it had booked the $16bn of impairments on goodwill and other unspecified mining property, plant and equipment.
“The calculations reflect the prevailing economic environment and also the latest mine plans,” Glencore said in the accounts, which were signed this month by the company and its auditors. In its 2013 results, released in March, the Glencore parent company recorded a still significant $US9.1bn of impairments, most of which was on goodwill.
The company said accounting standards meant those impairments were based on fair value at acquisition, so were significantly less than the impairments in the Australian accounts. ASIC’s areas of focus for 2013 reports included a warning that directors and auditors challenge asset values “particularly in the context of current economic conditions”.
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