WCM News

04 March 2005
Ernst & Young review the Application of AASB 139 to The WCM Group's caprelease Receivables Management programs.

Ernst & Young have completed a comprehensive review of The WCM Group's caprelease products.

The Australian Accounting Standards Board is implementing the Financial Reporting Council's policy of adopting the Standards of the International Accounting Standards Board, which will apply to entities with reporting periods beginning on or after 1st January 2005.

The Australian equivalent of the International Financial Reporting Standards (A-IFRS) is expected to have significant impacts on the accounting policies of Australian reporting entities and their reported financial position and financial performance. This ruling could affect particularly those companies that use "Securitisation" programs.

AASB 139 Financial Instruments: Recognition and Measurement (AASB 139).
In determining whether an entity should recognise or derecognise a financial asset, AASB 139 provides the appropriate accounting guidance under A-IFRS.

Ernst & Young's opinion is that by using The WCM Group's caprelease non-recourse program (100% underwritten) - the receivables of the Corporate would be classified as de-recognised. It is Ernst & Young's opinion that the receivables would in this case be able to remain "off" balance sheet.