By Andrew Starke
The listed pub owner ING Real Estate Entertainment Fund (IEF) has given notice that it will dispute a corporate regulator request that would compromise the value of its liquor and gaming licences.
The Australian Securities and Investments Commission (ASIC) this week proposed an alternative accounting treatment for the gaming and liquor licences attached to many of the fund’s properties.
At present, the IEF considers a property to comprising land, buildings and licences to be a composite asset and accounts for the resulting investment property at fair value.
ASIC proposes that the gaming and liquor licences be separated from the land and buildings and accounted for at initial cost less any accumulated impairment charges, a system the regulator believes will result in greater transparency.
However, a spokesperson for the IEF said the pub fund would face a reduction of approximately one percent per unit in net asset value and 23 percent per unit in net tangible assets if it adopted the proposed measures.
The fund’s auditors, Ernst & Young, have also rejected the alternative treatment and the matter is likely to end up before the Financial Reporting Panel, where the IEF says it will strongly defend its position.
The fund controls more than 20 funds around Australia and has a 49.9 percent stake in the assets of NRL club, the Penrith Panthers.