Transurban Corporate Report FY25 Financial statements
Section B: Notes to the Group financial statements for the year ended 30 June 2025
B3 Basis of preparation (continued) Key accounting estimates and judgements Accounting estimates and judgements are regularly made by the Group and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Group and that are believed to be reasonable under the circumstances. The accounting estimates and judgements that have the most significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows: • Potential impacts of climate-related threats and opportunities Note B3 • Constraining revenue recognition relating to legal proceedings Notes B5 and B21 • Provision for income taxes and recoverability of deferred tax assets Note B6 • Fair value of derivatives and other financial instruments Note B14 • Recoverability of goodwill, other intangible assets and equity accounted investments Concession Summary and Note B21 • Determination of CityLink and West Gate Tunnel cash generating unit Note B16 • Measurement of the maintenance provision Note B17 • Measurement of promissory notes and concession notes Note B19 • Assessment of control of A25, NorthWestern Roads Group (NWRG), Sydney Transport Partners (STP JV), and Transurban Chesapeake (TC) Note B21 • Contingencies. Note B24
KEY ACCOUNTING ESTIMATE AND JUDGEMENT Climate-related risks (threats and opportunities)
The Group has considered climate-related risks (noting that Transurban takes a broad view of risks under which it considers both threats and opportunities) in the preparation of these financial statements. Learnings to date continue to indicate that the key potential financial impact areas from these risks include the carrying amount of concession intangible assets, maintenance provisions and expenses, and revenue loss from operational disruption, which may become more impactful over time. The Group’s climate change framework summarises the organisational response to climate change, with priority areas related to the transition to net zero, resilient infrastructure and operations, and governance. Physical and transitional climate-related risks continue to be refined in the context of the Group’s business strategy and climate change framework, including the Group’s sustainability strategy which is being updated in preparation for the mandatory climate-related disclosures in FY26. Given the complexity of climate-related risk modelling, the ongoing risk assessment process and evolution of the Group’s response to climate-related risks, there may be material changes to the Group’s financial results and the carrying amount of assets and liabilities in future reporting periods. The Group continues to focus on business continuity programs and asset resilience against climate-related risks. The development of Climate Change Adaptation Plans (CCAPs) have enhanced the Group’s understanding of risks and mitigations across its infrastructure assets, particularly in the context of the high-emissions scenario (Representative Concentration Pathways (RCP) 8.5) climate projections from the Commonwealth Scientific and Industrial Research Organisation (CSIRO). In FY25, additional CCAPs were completed resulting in climate-related risk assessments and adaptation pathways for all of the Group’s operational assets, except for Rozelle Interchange which is planned for completion in FY26. Based on the risk assessments using data from our CCAPs and work undertaken across our Enterprise Risk Management process, the Group considers that the climate-related risks do not present any material financial reporting impacts within the next financial year. The long-term nature of the Group’s concession assets results in an exposure to climate-related risks over an extended period of time. The financial impacts of acute weather events can result in incremental costs relating to infrastructure repairs, increased maintenance and revenue loss from operational disruptions impacting traffic flows. The assessment of historical extreme weather events, including Ex-Tropical Cyclone Alfred, indicates that direct incremental costs of the event itself has not been material to the Group’s financial performance, financial position or cash flows. The impact of historical acute weather events on assets and operations will continue to be observed, informing future risk management strategies, particularly considering the increasing frequency and intensity of extreme weather events based on climate science data. The judgements and assumptions used to estimate the maintenance provision in the balance sheet reflect current estimates of future maintenance costs and asset lifecycles and the ongoing delivery of asset-specific CCAPs including preventative and regular maintenance schedules and engineering inspections. There were no material changes to the cash flow profile which underpin the reported maintenance provision as a result of historical acute weather events. While no material financial impacts have been identified within the next financial year, it is possible that impacts on lifecycle planning and operations affecting maintenance requirements could impact the maintenance expense or maintenance provision in the medium to long term. The carrying amount of the Group’s concession intangible assets are reviewed each reporting period to ensure carrying amounts do not exceed recoverable amounts. As at the reporting date, the potential impacts of climate-related risks on future cash flows are not expected to be significant enough to erode the existing valuation headroom. The Group will continue collaborating with climate experts, engineers, and consultants to ensure that risk evaluations reflect Transurban specific considerations within the context of global climate projections. Findings from the Group’s climate risk assessments will continue to inform planning and operations, including the integration of potential medium and long-term impacts of climate-related risks into asset adaptation strategies, business planning and capital allocation as required.
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