The corporate watchdog has confirmed it raised concerns about the value of Spotless Group's assets before the cleaning and catering company wrote down its goodwill that led to a steep fall in its share price.
Spotless made a loss of $358 million, partly due to $391 million in impairments, in its half-year results announced on February 28.
Its share price slipped as much as 16 per cent on the result and writedowns.
The Australian Securities and Investments Commission on Monday said it questioned Spotless's resource business recoverable amount of goodwill - before its $99.2 million writedown in the half-year report - as part of ASIC's Financial Reporting Surveillance Program calling for meaningful information to be included in financial reports.
"ASIC continues to see companies use unrealistic assumptions in testing the value of assets or that have applied inappropriate approaches in areas such as revenue recognition," ASIC commissioner John Price said in a statement.
News that makes sense
Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.
The commission's crackdown on companies' financial reports has also included the goodwill value Nine Entertainment Corp was carrying for its television network.
Nine's $260 million non-cash impairment on its TV network in its half-year results in February, which it attributed on softer ad markets and falling earnings for the unit, was also included after ASIC raised concerns.
