❓ Hon Paul Llewellyn questions the Forest Products Commission (FPC) about a $10 million claim reversal related to the Government's old growth forest protection policy and its impact on the FPC's finances. The answer clarifies the claim's origin and the accounting treatment.
AnsweredQoN 4783Legislative Council
QuestionView source ↗
In relation to the statement in the Forest Products Commission’s (FPC) Annual Report for 2004-05, at page 81 that there is provision for a claim under arbitration in the sum of $10 million, and the statement in the FPC’s Annual Report for 2005-06 at page 88, that the provision raised in 2004-05 for claims lodged against the Commission arising out of the Government’s protecting our old growth forests policy, had been reversed due to the Government’s decision not to hold the Commission responsible for the claim -
(1) What company or companies made the claim(s) against the FPC for which the Government has taken responsibility?
(2) What were the grounds of the claim(s)?
(3) Why has this claim not only been written out of the accounts but been replaced by $10 million in ‘revenue’, resulting in a $20 million improvement in the FPC’s finances?
(1) What company or companies made the claim(s) against the FPC for which the Government has taken responsibility?
(2) What were the grounds of the claim(s)?
(3) Why has this claim not only been written out of the accounts but been replaced by $10 million in ‘revenue’, resulting in a $20 million improvement in the FPC’s finances?
AnswerView source ↗
Answered
19 June 2007
Responded by
Minister for Forestry
Response time
41 days
(2) The claim, which arose as a result of the implementation of the Government's Protecting Our Old Growth Forests policy, was for a loss of profits arising from an alleged undersupply of logs, in breach of the log supply contract between the Forest Products Commission and Cardoso. (3) Reversing the provision in accordance with standard accounting practice resulted in an improvement of $10 million in the Forest Products Commission's finances in 2005/06, and not a $20 million improvement. Writing back the provision that was raised in the 2004/05 financial year, resulted in a reduction of expenses (a credit to the profit and loss) of $10 million in the 2005/06 financial year.
(3) Reversing the provision in accordance with standard accounting practice resulted in an improvement of $10 million in the Forest Products Commission's finances in 2005/06, and not a $20 million improvement. Writing back the provision that was raised in the 2004/05 financial year, resulted in a reduction of expenses (a credit to the profit and loss) of $10 million in the 2005/06 financial year.
(3) Reversing the provision in accordance with standard accounting practice resulted in an improvement of $10 million in the Forest Products Commission's finances in 2005/06, and not a $20 million improvement. Writing back the provision that was raised in the 2004/05 financial year, resulted in a reduction of expenses (a credit to the profit and loss) of $10 million in the 2005/06 financial year.
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