Non-cash impairment charges affect Polarcus fourth quarterCompany News // February 9, 2016
Referring to a stock exchange release issued on 6 January 2016 in which Polarcus Limited announced a restructuring plan with support from key stakeholders, the company has announced that it had received a request for information regarding impairment of vessels and seismic equipment from The Financial Supervisory Authority of Norway.
Polarcus has now completed its impairment review using a value in use test-based on discounted cash flows. As a result, the company will record non-cash charges of approximately US$242 million that will materially impact financial statements for the fourth quarter 2015. The charges are related to the following two asset classes:
• An impairment of intangible assets of approximately US$27 million.
• An impairment of the carrying value of the vessels and seismic equipment of approximately US$215 million.
The impairments are driven by the weak market fundamentals with falling day rates. The impairment charges are expected to be mostly offset by accounting gains in the first quarter 2016 arising from the implementation of the restructuring plan.
The company will issue its fourth quarter 2015 financial statements on 29 February 2016.