The Post Office has claimed it ‘grudgingly’ agreed to write-off #50m impairment in connection with redundant Parcelforce assets, write our parliamentary staff.
Its reluctance to comply with FRS 11 was revealed in a Commons Trade and Industry Committee report which warned that despite doing so ‘there are grounds for fearing that the Post Office may struggle to maintain even its current level of profitability.’
The accounts for 1999-2000 show an overall loss of #415m, the first such loss for many years, largely attributed to the exceptional write-down of #571m in expenditure on the Horizon project, aimed at computerising the sub-post office network.
Evidence from the Post Office Users National Council alleged that the Post Office ‘has shown considerable zeal in its application of the impairment accounting standard.’ The organisation argued: ‘The Post Office has taken this opportunity to clean up the balance sheet and to ‘dump’ everything possible with an eye to the future.
‘If you are going to have a bad year then have a really bad one,’ it said. But Post Office chief executive John Roberts defended the move, explaining the Post Office would have preferred not to have done it but complied with ‘very strong audit advice’.
The report’s main thrust was to raise questions over the modernisation of the sub-Post Office network and its proposed Universal Bank for welfare recipients without commercial bank accounts to receive payments.
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