Accounting Standard AASB 2026-1 Amendments to Australian Accounting Standards – Disclosures about Uncertainties in the Financial Statements
Amendments to AASB 136Amendments to AASB 136
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Amendments to AASB 136
Illustrative examples accompanying AASB 136
| Paragraphs IE90–IE95, their related headings and the italicised introductory text are added as Example 10. |
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Example 10 Disclosure of assumptions related to uncertainties
This example illustrates the requirements in paragraphs 134(d)(i)–(ii) and 134(f) of AASB 136. In particular, it illustrates how an entity discloses information about the key assumptions it uses to determine the recoverable amounts of assets.
Background
IE90 The entity’s operations result in a high amount of greenhouse gas emissions. The entity is subject to greenhouse gas emission regulations in some of the jurisdictions in which it operates. Those regulations require the entity to acquire emission allowances for some of its emissions, resulting in costs (emission allowance costs).\* The entity expects such regulations to become more widespread in the future.
\* This example illustrates only the entity’s consideration of emission allowance costs when testing an asset for impairment and its disclosure of information about related key assumptions. The example does not cover, for example, other costs an entity might incur in managing climate-related risks.
IE91 The entity has allocated a significant amount of goodwill to one of its cash-generating units (CGUs) and tests that CGU for impairment at least annually. The entity has concluded that the CGU’s recoverable amount is greater than its carrying amount and, therefore, recognises no impairment loss in the current reporting period. The entity has determined that its assumptions about future emission allowance costs are key assumptions – that is, they are among the assumptions to which the CGU’s recoverable amount is most sensitive.
Application
Reasonable and supportable assumptions
IE92 The entity measures the value in use of the CGU when testing it for impairment. Applying paragraphs 33–38 of AASB 136 in measuring the CGU’s value in use, the entity bases its cash flow projections on reasonable and supportable assumptions that represent management’s best estimate of the range of economic conditions that will exist in the future. These assumptions include assumptions about future emission allowance costs.
IE93 The assumptions about future emission allowance costs include assumptions about the future price of emission allowances and future emission regulations. However, these assumptions do not reflect risks already reflected in the discount rate.
Disclosures
Key assumptions and approach used to determine the values assigned to them