The Norwegian Financial Supervisory Authority (Finanstilsynet) has published findings from its review of DOF Group ASA’s financial reporting, concluding that the principles used to determine the recoverable amount for the group’s vessels in the 2022 annual financial statements, and in the 30 September 2022 comparative figures presented in the Q3 2023 interim financial statements, were not compliant with IAS 36 Impairment of Assets. DOF Group has informed the supervisor that it has prepared new value-in-use calculations as of 31 December 2022, which it says result in a net increase in carrying amounts of NOK 266 million for the vessels, and that it will correct the error as a restated opening balance at 1 January 2023 in its Q4 2024 interim report and 2024 annual report under IAS 8. Finanstilsynet did not obtain or verify the company’s new calculations. The review also covered the basis for the 30 September 2022 comparative figures in Q3 2023, where the supervisor assessed that the methodology reflected inconsistent cash-generating unit definitions and assumptions akin to a distressed fleet sale discount that did not align with a going-concern IFRS framework, while noting it had not assessed the size of any errors and that it was not proportionate to require new calculations for prior interim reporting. In addition, the report flags shortcomings in note disclosures in the 2023 annual report and Q3 2023 interim report regarding the impairment approach and the description of work performed at period end, which the company has indicated it will update so the disclosures match the methods actually used. DOF Group is required to inform Finanstilsynet in writing where and how the correction is reflected in the Q4 2024 interim report and the 2024 annual report within two weeks after those reports are published. Finanstilsynet also reminded the company to consider its obligations on public disclosure of inside information under the EU Market Abuse Regulation.

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