The company’s accounts, published today (Thursday), include a note clarifying details of its acquisition of Mundays (656) Limited which was requested by the Financial Reporting Review Panel.
It called for the changes to ensure Avesco complies with FRS 9, the accounting standard that deals with associates and joint ventures, and FRS 7, which deals with fair values.
Under the standards, the cost of acquisition of Mundays should have been the amount of cash paid and the fair value of other purchase consideration.
However, Avesco’s 2000 accounts recorded that the cost of the investment had been determined by the net book value of the equipment transferred, together with acquisition costs.
The FRRP, which has the power to take companies to court if they don’t meet its requests, initiated discussions with Avesco directors.
This resulted in a note in the 2001 accounts clarifying that, in the opinion of the directors, the book value of the acquisition was about the same as its fair value.
‘We welcome this action taken by the directors and regards its enquiry as concluded,’ said the FRRP.
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