Vitafoam has reclassified its Sierra Leonean assets valued at N640 million from “disposal group” to “Investment in subsidiary” following the inability to find a buyer.
This formed a key audit matter as part of its 2020 Full Year results.
“At the Board meeting held on 3rd September 2020 the Directors resolved to discontinue the disposal of the Company’s subsidiary, Vitafoam Sierra Leone as they have not been able to secure a buyer for the investment and the investment cannot be held indefinitely as “held for sale,” Vitafoam said.
Requirement of IFRS 5, states that when an entity ceases to classify the asset (or disposal group) as held for sale, the entity shall measure the ‘disposal group’ at the lower of its carrying amount before the asset (or disposal group) was classified as held for sale adjusted for any depreciation, amortisation or revaluations that would have been recognized.
Vitafoam’s profit rose 72 percent in the period on lower costs and slightly higher revenues.
The stock of the foam manufacturer is up some 107 percent in the past year for a market capitalisation of N11.25 billion.
Vitafoam Nigeria Plc manufactures foam products in Nigeria. The company makes and sells mattresses, pillows, sponges, carpet underlays, mats, foam blocks, and other foam products.