Viva Energy Group Ltd. has adjusted its accounting methodology for its financial report, resulting in an increase in impairment expenses of AU$25 million.
The adjustment comes after the Australian Securities and Investments Commission (ASIC) reviewed the fuel and convenience retailer’s financial report for the year ended December 31, 2024.
ASIC raised concerns about Viva Energy’s approach to impairment testing of its convenience retail sites. The company had grouped a subset of sites with high Shell Card utilisation into a single cash-generating unit (CGU).
Management had argued these sites were interdependent due to the wholesale Shell Card offering.
However, ASIC noted that Accounting Standard AASB 136 requires entities to test assets at an individual level whenever possible.
ASIC took the view that because individual retail sites could be assessed independently, grouping them into a broader CGU was inappropriate. Consequently, Viva Energy has moved to assess all convenience retail sites as separate CGUs to align with regulatory requirements.
The change resulted in a AU$25 million impairment expense for the year ended December 31, 2025, which represents approximately 4.5 per cent of the total AU$558.8 million impairment expense recognised by the group for its retail sites in the 2025 financial year.
In its latest report, Viva Energy disclosed: “The group has revised its judgment and now treats these sites consistently with all other retail sites as separate CGUs for impairment testing.”
The company noted that the impact would not have been significant had the change been applied retrospectively to previous periods.
ASIC’s intervention is part of its ongoing financial reporting and audit surveillance program, which seeks to ensure compliance with the Corporations Act 2001 and Australian Accounting Standards.
The regulator has used this case to remind financial report preparers that rigorous judgment is essential when conducting impairment testing to ensure asset carrying values are supported by reasonable, transparent assumptions, thereby maintaining the integrity of Australia’s capital markets.
