Auditors continue to have doubts about the K + S balance sheet

Status: 11.11.2021 3:45 p.m.

No all-clear for the salt and fertilizer manufacturer K + S: The auditors commissioned by the financial supervisory authority BaFin want to continue the balance sheet audit of the group because, according to a preliminary assessment, they see one point in particular as critical.

The salt and fertilizer manufacturer K + S cannot yet tick off the review of its balance sheet by German financial supervisors. In a preliminary assessment, the German Audit Office for Accounting (DPR), which was commissioned with the investigation by the financial supervisory authority BaFin at the beginning of the year, expressed itself critically, said K + S.

The supervisory authority had seen concrete indications that the company could have overestimated the balance sheet value of the Potash and Magnesium Products unit and that an impairment should have taken place earlier. This concerns the financial statements for 2019 and the first half of 2020. According to K + S, the FREP, which acts as a kind of balance sheet police, has now criticized in its preliminary assessment that the company had not properly determined the value of its potash and magnesium products unit .

K + S knows back allegations

The company rejected the allegations, including an analysis by external auditors, as unfounded. The company had previously referred to an unqualified certificate from Deloitte’s auditors for the financial statements.

The MDAX-listed shares fell by up to twelve percent in the Xetra electronic trading system to 13.41 euros, making them by far the biggest loser in the index for medium-sized stocks. In the course of trading, the paper was able to make up some of the losses.

The value adjustments were incurred because the company had misjudged the long-term development of potash prices. In 2020, K + S broke a loss of around 1.8 billion euros. In the meantime, K + S has become significantly more optimistic about the business due to the rise in potash prices.

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