Independent News & Media has never disguised its irritation at the FRS10 accounting standard under which intangible assets like newspaper titles cannot be taken into the balance sheet.
Indeed, Independent went to the trouble of changing its yearend last year to avoid having to comply with the accounting standard, which finance director Mr James Parkinson at the time described as "rubbish and fundamentally flawed".
Six months on, Independent's attitude towards FRS10 has not softened and, in yesterday's half-year statement, the group went to the trouble of producing two balance sheets - one in line with FRS10 and a second, which includes Independent's valuation of its titles under intangible assets.
The main effect of the removal of more than £340 million of intangible assets from the balance sheet is to reduce Independent's shareholders funds to just £248 million and increases the group's debt/equity ratio.
In reality, debt/equity is a misleading measure of a company's ability to pay off debt, with interest cover - the multiple by which interest payments are covered by operating profits - being a more accurate measure.
On this basis, Independent's debt and interest repayment capability cannot be questioned, with interest charges covered 4.6 times, while net debt as a multiple of earnings before interest, tax and depreciation is 3.9 times covered, "well within investment grade" parameters, according to Mr Parkinson.
