Viva Energy Group Limited (Viva Energy) has changed an accounting judgement applied in its financial report for the year ended 31 December 2025, resulting in an increase in impairment expenses of $25 million. This follows a review conducted under ASIC's financial reporting and audit surveillance program.
ASIC reviewed the financial report of Viva Energy for the year ended 31 December 2024 and raised concerns about its approach to impairment testing of its convenience retail sites. The approach involved assessing some sites as a group (as part of the Shell Card cash-generating unit (CGU)) on the basis that Shell Card is a wholesale offering across Viva Energy's Australia-wide network, rather than assessing them all on an individual site basis.
Accounting Standard AASB 136 Impairment of assets (AASB 136) requires an entity to test assets for impairment at an individual asset level where possible. Impairment should only be assessed at CGU level if the recoverable amount of an individual asset cannot be determined.
Because Viva Energy was able to assess impairment for each individual retail site included in the Shell Card CGU, ASIC took the view that the group approach was not appropriate.
Viva Energy recognised a total impairment expense for its retail convenience sites for the year ended 31 December 2025 of $558.8 million. Of the total impairment expense, $25 million (4.5%) is attributable to the change in approach to assessing all retail convenience sites at the individual asset level in accordance with ASIC's view.
ASIC reminds preparers of financial reports that careful judgement is required when assessing assets for impairment in accordance with accounting standards.
Background
Viva Energy operates a network of small convenience retail sites typically offering fuel, food, beverages, and everyday essentials for on‑the‑go customers. These sites serve both retail and wholesale fuel customers, with the wholesale offering provided via Shell Card.
In its financial report for the year ended 31 December 2024, Viva Energy assessed the recoverable amount of a subset of retail sites on a combined basis as a CGU. All other convenience retail sites were assessed for impairment as separate CGUs.
An impairment occurs when an asset's carrying amount exceeds its recoverable amount. Assets must not be carried at more than their recoverable amount and must be written down if that value is not supported by reasonable assumptions.
In Viva Energy's financial report for the year ended 31 December 2025, it made the following disclosure:
'During the year, the Group reassessed its approach to the allocation of certain sites to Cash Generating Units (CGUs) for impairment testing purposes. Historically, sites with high Shell Card utilisation were included within a Shell Card CGU based on management's judgment that they depended on each other for the generation of cashflows from the use of Shell Card.
The Group has revised its judgment and now treats these sites consistently with all other retail sites as separate CGUs for impairment testing. This change has been applied in the 31 December 2025 Financial Report. If it had been applied retrospectively the impact would not be material on the prior period.'
ASIC's financial reporting and audit surveillance program aims to improve the quality of financial reporting, supporting investor confidence and the integrity of Australia's capital markets.
ASIC conducts regular risk-based reviews of the financial reports of selected companies and other public interest entities to monitor compliance with the Corporations Act 2001 and Australian Accounting Standards.
