South Africa's Steinhoff cuts value of goodwill assets in 2017 accounts
today Apr 30, 2019
South African retailer Steinhoff said on Tuesday it had reduced the value of goodwill and intangible assets recorded in its accounts for the end of September 2017 by 1.8 billion euros ($2 billion) to 7.2 billion euros.
Steinhoff has repeatedly delayed its 2017 and 2018 financial statements after a $7.4 billion accounting fraud that stunned investors in the multinational retailer that had been at the vanguard of the European discount furniture retail industry.
Steinhoff had published interim results for the period ending March 2018 that put the value of goodwill and intangible assets at Sept. 30 at about 9 billion euros.
The company said on Tuesday the reduction followed a “reassessment of the value of the goodwill and intangible assets of Mattress Firm Inc.”
Mattress Firm, a Steinhoff business in the United States, filed for voluntary bankruptcy protection in October 2018 and exited the process less than two months later.
Steinhoff said in December 2017 it had uncovered accounting irregularities, erasing about 85 percent of its market value and throwing it into a liquidity crisis.
Investigators found a small group of former Steinhoff executives and individuals from outside the company implemented deals that substantially inflated the group’s profit and asset values.
Earlier this month, the company said it was once again delaying the release of its 2017 and 2018 financial statements because complexities in the process were slowing the work of external auditor Deloitte.
The statements are now due on May 7 and June 18 respectively.
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