Summary
This guide focuses on the implications of climate change on impairment testing of non-current assets under IAS 36 Impairment of Assets. It outlines a structured approach consisting of three main steps. The first step involves identifying indicators of impairment, which may include both internal and external factors influenced by climate-related issues. The second step is to determine the recoverable amount of an asset or cash-generating unit (CGU), incorporating climate-related risks into key inputs such as cash flows and discount rates. The final step emphasizes the importance of disclosing relevant information to meet user expectations in financial statements. The guide also provides practical insights and examples to navigate the complexities of integrating climate considerations into impairment assessments. It highlights the necessity for clear and transparent disclosures that connect financial and sustainability reporting, ensuring stakeholders have the relevant information for informed decision-making.
