Recoverability of non-current assets, including property, plant and equipment ($6,289111), intangible assets ($1,731m) and investments ($1,237m) (continued)
* using our industry knowledge and information published by regulatory and other bodies to assess the reasonableness of assumptions and the impact of technology, market and regulatory changes on those assumptions;
- invo!ving our va!uation specialists to assess the reasonableness of the discount rates by considering comparable market information and evaluating the economic assumptions relating to cost of debt and cost of equity; and
- for regulated assets, assessing the appropriateness of using long term (up to 20 years) cash flow forecasts against accounting standard requirements by considering industry practice and the long term naturę of the Group's regulated asset base.
• evaluating managemenfs sensitivity analysis in respect of the key assumptions. including the identification of areas of estimation uncertainty and reasonably possible . changes in key assumptions. We assessed the appropriateness of the related disclosures against accounting standard requirements;
• comparing carrying values of CGUs to available market data, such as implied earnings and asset multiples of comparable entities.
Valuation of former gas business environmentai provisions - (contained within Environmental and Restoration provision of $83.9m) | |
Refer to the following notes to the financial report: Notę 2{q) Summary of significant accounting policies -Provisions, Notę 4(xi) Critical accounting estimates and judgements - Environmental provisions, Notę 17 Provisions and Notę 30 Contingent liabilities. | |
The key audit matter |
How the matter was addressed in our audit |
Valuation of former gas business environmental provisions is a key audit matter due to the judgement involved in auditing management's estimate of the futurę costs of remediating several sites associated with the former gas businesses in New South Wales. In particular, management make estimates and judgements in respect of: - planned remediation activities, including methods and technologies to be applied, the possibility that applicable laws and standards may change with • time, obtaining necessary regulatory/council approva!s, and |
Our procedures included, amongst others: • considering management's process for the identification and monitoring of potential obligations for each site, based on their specific condition. We used sources such as minutes from meetings of the Group's Risk. Health, Safety and Environment committee, management committees and internal legał claims registers, as well as discussions with internal legał counsel and senior management. We assessed the consistency of this information against management's cash outflow assumptions; • considering the impact of relevant current statutory and regulatory obligations, and our understanding of their futurę direction, on expected futurę cash outflows. We assessed the consistency of correspondence with the |
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