2016-02-11
4692. MS DUNN — To ask the Minister for Agriculture: In relation to the 2014–2015 VicForests Annual Report under “Receivables-provision for doubtful debts” which states “in accordance with the Customer Credit Policy and due to objective evidence that VicForests may not be able to collect all amounts due according to the original terms of receivables”, with a matching provision made of $1.5 million dollars:
(1) Does the Minister need to approve any debt write-offs, should they occur;
(2) What are the circumstances in which this provision was made;
(3) Is there any scope to recoup any of these monies;
(4) Does the $1.5 million provision apply to one or several customers and if so how many; and
(5) What steps are VicForests taking to prevent further losses arising from customers who refuse to pay them.
ANSWER:
(1) VicForests is an autonomous commercial entity governed by an independent Board of Directors. VicForests' Board is responsible for managing VicForests' operations, including approving any debt write-offs.
(2) The cited provision of $1.5 million was made in accordance with Note 1(k) on page 30 of the VicForests Annual Report 2014-15: “At the end of each reporting period, VicForests assesses whether there is objective evidence that a financial asset or group of financial assets is impaired. All financial instrument assets, except those measured at fair value through profit and loss, are subject to annual review for impairment.”
(3) The $1.5 million debt is reported as a provision as potential remains for this debt to be recovered. VicForests identified, in line with accounting standards, that there is also the potential that it may not be recovered.
(4) Details concerning VicForests' timber sales agreements, including counter-party information, are commercial-in-confidence.
(5) VicForests continues to actively manage its receivables, as per VicForests' Customer Credit Policy, to mitigate non-payment risks.
Hon Jaala Pulford MP
Minister for Agriculture