Webjet Limited
.JPG)
WEB Details
Webjet Limited (ASX:WEB) has updated on its disagreement with its auditor (BDO Audit) on a technical accounting matter relating to its financial statements for the year ending 30 June 2017. The issue relates to the treatment of transactions associated with the Thomas Cook agreement which the Company entered in August 2016. BDO Audit (SA) Pty Ltd (BDO) has indicated to the Company, that despite its review and subsequent sign-off of the Company's accounts for the six months ending 31 December 2016, it no longer agrees with the accounting treatment adopted by the Company in respect of recognition of the agreement as an intangible asset and of recognition of the fixed management fee payable to Webjet under the agreement as income. However, the position adopted by BDO is contrary to the advice obtained by Webjet from two Big 4 accounting firms on the issues. Webjet has given BDO access to its advice on the accounting issues, and despite doing so, BDO has confirmed the change in its view.
Consistent with its external advice, the Webjet Board intends to apply the same accounting treatment in respect of the Thomas Cook agreement for FY2017 as it used in its financial statements for the six months ending 31 December 2016 (which were signed off by BDO in February 2017). As a result, Webjet expects that the audit report to be issued by BDO in respect of Webjet’s financial statements for the year ended 30 June 2017 will be qualified, and will not have any impact on cash flows or economics of the Thomas Cook arrangements. The businesses continue to perform strongly and it expects to report EBITDA consistent with its earnings guidance of $80 million, of which $61 million is expected to come from its continuing businesses, after expensing costs associated with the launch of FIT Ruums.
WEB Daily chart; (Source: Thomson Reuters)
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