The market downturn has forced financial services firm WHK Group (WHK) to write down close to 60 per cent of the current asset carrying value of its investment in Next Financial.
The listed firm informed the market of its decision to write down between $14 million to $17 million of the financial services firm in its preliminary results for the six months ending 31 December 2008.
"The directors believe that it would be prudent and appropriate in the current market environment to substantially write-down the group's book carrying value of Next," a company statement to the Australian Securities Exchange said.
"As a result, the directors confirm that they intend to include an impairment charge in the final results for the first half and are presently assessing this in detail, but indicatively expect it to be in the range of $14 million to $17 million, representing a write-down of between 50 and 60 per cent of the current asset carrying value of $28.4 million."
As well as having to write down its investment in Next, market conditions battered WHK's financial services division.
The firm's funds under advice (FUA) declined to $7.7 billion at the calendar year ended 30 June 2008 on the back of a sharp drop in investment markets.
WHK's new business inflows were also affected by the market conditions, falling 32 per cent to $323 million.
However, the firm experienced a 42 per cent spike in administration revenue from self managed super funds to $10.2 million.
WHK Group purchased a 30 per cent interest in Next in May 2007.
The group's interest in Next is held as an equity accounted investment, rather than as a core business asset.
