Research Team: Joanne Tingey-Holyoak, Bethany Cooper, Lin Crase, John Pisaniello

Partners: CPA Australia (funder)


This project is part of the 2022 CPA Australia Global Research Perspectives Program with the objective of directly addressing the role of the accountancy profession in tackling climate change by identifying and investigating a range of approaches for linking climate risks to accounting for long-lived assets.

Through identification of such techniques, engagement with practitioners, isolating links to current approaches, and exploring asset accounting decision making, preliminary guidance has been developed that can assist accountants. In the interests of parsimony, we focus on the food sector as it moves toward climate accounting for long-lived assets. Nonetheless, some of the findings are likely applicable to other sectors.

The accounting community is concerned about how to practically follow guidance on accounting for long-lived assets in a changing climate. Standards and guidance are emerging and becoming closer to being mandatory, however, they have not provided the level of clarity required by the profession on the uncertainty of future climate and how this impairs some assets.


Results from global literature and standards review found that whilst frameworks and standards are emerging, guidance at the more specific level has been limited. It is acknowledged in the review, that very few organisations hold expertise, data, and modelling capability to integrate climate scenarios into their long-lived asset accounting, posing an additional risk to accountants. The review draws upon the emerging regulatory frameworks for climate accounting and highlights the additional knowledge and tools from other disciplines that might help shape a response by the profession.

The study found a spectrum of available approaches for incorporating climate risk and uncertainty into financial accounting for climate change impacts on long-lived assets. Key accounting and financial services actor interviews reveal the current lack of engagement with climate change accounting for long-lived assets and the barriers and opportunities for the future. This includes the need for clear decision criteria, improved data collection and sharing, and accessible risk models. The feasibility of the measurement models was tested with results finding the spectrum of approaches appealing and necessary. Shared data and shared meaning around databases were of importance. To explore risk models in use around the world, a desk based global company scan and three case studies were undertaken to consider how such tools are being used internationally. Results found that across three countries at various stages of TCFD framework implementation, climate impacted asset accounting is relatively rare, but an emerging field where models presented are in effective use.  

Findings were synthesized which included refining and finalization of a Decision Criteria Framework for Accounting for Long-Lived Assets in a Changing Climate. The guidebook demonstrates how results can start to assist accountants to navigate the uncertainties and risks that come with climate change and create the opportunity to improve decision making for the profession operating in that sector.

Benefits to industry

In 2022, the International Sustainability Standards Board (ISSB) released IFRS S1 and S2 for public comment to be resolved by end of 2022. CPA Australia have already commissioned powerful research exploring the impacts of Australia’s international climate commitments on the accountancy profession and the Big 4 and many mid-tier firms have released general guidance. What this project has achieved is to supplement such work to support CPA Members and the business community through a deep dive specifically into accounting for long-lived assets in an industry highly exposed to climate-risk.

Benefits to UniSA

Through the investigation undertaken in this project and the resulting preliminary guidance, UniSA contributes significantly to the emerging body of work serving to arm the profession with better awareness and understanding of data and models for asset impairment decision making in a changing climate. Guiding more effective and efficient decisions for accountants is central to the success of any moves toward mainstreaming climate accounting, especially for aging and potentially redundant assets.