Armer also asked the FMA to investigate Fonterra directors' calculations on executive performance pay and why they were not independently audited.
PwC had been Fonterra's auditor since the dairy exporter's formation in 2001. It surrendered the contract 2019 after pressure from shareholders, including Armer, who claimed it was too close to the Fonterra board.
The FMA's decision not to take action on the writedowns is separate to Armer's complaint about PwC's auditing. That matter is understood to be still under inquiry by the frontline regulator of auditors, NZICA, the chartered accountants organisation. The FMA engaged with NZICA over the complaint.
Armer has been approached for comment.
The FMA in a statement said its inquiries followed complaints about the timing of the accounting writedowns relating to Beingmate Baby and Child Food Co Ltd (Beingmate) and China Farm assets (China Farms). The values of these, and other, assets were re-stated in a Fonterra market announcement in August 2019.
Prior to these inquiries, the FMA said it had also reviewed the valuation of Beingmate in Fonterra's 2017 financial statements and China Farms in its 2018 financial statements.
"In the context of these various inquiries, the FMA has spent considerable time seeking to assess the reasonableness and supportability of forecasts used, and assumptions applied, in valuing parts of Fonterra's business and related disclosures," the authority said.
"From September 2017 to April 2018, the FMA engaged with Fonterra on its valuation of Beingmate for the year ended 31 July 2017. The engagement focused primarily on the base share price and the premium applied in the valuation of this investment.
"Fonterra wrote down the Beingmate investment by $405 million in its half year financial statements for the period ended 31 January 2018, and enhanced its disclosures relating to the key inputs and assumptions, including the sensitivity of the value of the investment to changes in key assumptions."
The FMA said it engaged with Fonterra regarding its valuation of China Farms prior to the release of Fonterra's 2018 financial statements. As part of this engagement, the FMA reviewed the calculations and assumptions used by Fonterra management in the valuation of these assets.
During this engagement, Fonterra enhanced its relevant disclosures on key assumptions, and sensitivities to changes in key assumptions, applied in the valuation of China Farms.
"The FMA acknowledges the duration of these inquiries, while also highlighting the complexity and technical nature of any inquiry where significant judgements and assumptions are used in determining valuations. Both the quantity and sufficiency of accounting records provided by entities in complex areas such as valuations and impairment of assets has an impact on the FMA process."
"The valuation of non-financial assets, including goodwill, continues to be an important area of focus in the FMA's financial reporting monitoring activities. This includes a focus on the requirement to keep, and be able to make promptly available, proper accounting records to ensure compliance with applicable accounting standards."