Irish Continental Group (ICG) parent company of Irish Ferries, has successfully defended itself against a challenge from the accounting watchdog over its decision not to write down the value of its fleet of ferries at the height of the Covid-19 crisis in 2020, even as it plunged into a net loss for the year.

The Irish Auditing & Accounting Supervisory Authority (Iaasa) said in a report this week on recent financial reporting issues across Irish companies that it had taken issue with ICG over a statement in its 2020 accounts that no indications of impairment had been identified across its assets.

The authority noted that the pandemic had significantly affected the Irish Ferries owner’s operations that year, resulting in revenue sliding 33.4 per cent to €212.4 million and the company sliding into a €12.3 million loss amid travel restrictions. It added that one ferry, known to be the Dublin Swift which serves the route from Dublin to Holyhead, did not operate any sailings that year.

An impairment charge would have pushed ICG deeper into loss-making territory.

ICG, led by chief executive Eamonn Rothwell, responded to Iaasa saying it did not consider the revenue and earnings drop to be an indicator of impairment in respect of the ferry fleet “as it was assessed to be a once-in-a-lifetime event and not a long-term structural change, and the impact of a one-year downturn in revenues would not have a material impact for long-life vessels”, the report said.

However, Iaasa was of the view that “one or more” impairment indicators would have been triggered under accounting rules as a result of Covid-19 travel restrictions, it said. It added that it believed that ICG’s interpretation of an international accounting standard meant that “there would unlikely be an indication of impairment ever being identified”.

Further reading from The Irish Times.