Notes to the Financial Statements Note 3: Restructuring and Impairment Expenses continued Goodwill: Goodwill is initially allocated to a group of CGUs but is monitored at the segment (business unit) level. The recoverable amount of the group of CGUs incorporates forecast cash flows from the underlying product IP and other operating assets, after which a terminal value is applied to reflect cash flows beyond the explicit forecast period. The results of the impairment testing at 30 June 2026 show that with the exception of CSL Vifor CGU, each of the remaining business unit’s recoverable amount exceeds the carrying value of its net assets, inclusive of goodwill. Key Judgements and Estimates The Group's impairment assessment requires significant judgement. The determination of whether goodwill and IP intangibles are impaired requires estimation of the recoverable amount of CGUs or individual assets, primarily using valuein-use calculations. These calculations use cash flow projections based on operating budgets and the Group's strategic business long range plan. A terminal value, based on our view of the longer term growth profile of the business unit is applied to the recoverable amount assessment of CGUs. For IP intangibles, cashflow projections are extrapolated over periods consistent with the respective asset's estimated useful life. The projected cash flows are discounted using the Company's estimated weighted average cost of capital, being a post-tax discount rate of 8.3% (2025: 8.0%) and an equivalent implied pre-tax discount rate of 10.5% (2025: 9.5%). The discount rate is derived with reference to external analyst inputs, long-term government bond rates and the long-term cost of debt, and is adjusted for country risk premiums where applicable. The post-tax discount rate applied to the Group's material assets ranged between 8.3% to 9.5%. The determination of cash flows over the life of an asset requires judgement in assessing future demand for the Group’s products, climate-related impacts where these can be reliably estimated, actions of competitors, sales erosion rates after the loss of exclusivity, timing of entry of generic competition, changes in product volume, pricing and costs, impact of regulatory changes, outcomes from R&D activities, and other costs incurred by the Group. Factors considered in the exercise of judgement include the progress of research projects, probability of technical and regulatory success, time to market and the anticipated competitive landscape. These assumptions are inherently uncertain and may change in future periods, particularly for certain intangible assets where recoverable amounts are more sensitive to changes in key assumptions. Accordingly, future impairment charges or reversals may arise where actual market conditions, competitive dynamics, reimbursement outcomes, regulatory developments or commercial performance differ from management's current expectations. Where sensitivity analyses are presented below, they illustrate the effect of changes in key assumptions on recoverable amounts, with all other assumptions held constant. The impairment assessment performed for the year ended 30 June 2026 reflects the latest information available at the reporting date, including Board-approved operating plans and management's long-term commercial assumptions. For assets and CGUs where substantial headroom exists, management has concluded that reasonably possible changes in key assumptions would not result in an impairment. The Group recorded impairment and related charges unrelated to restructuring activities of $7,124m ($5,392m post-tax), comprising asset impairments of $6,881m and other expenses of $243m. Onerous contract costs represent take-or-pay commitments where forecast utilisation is no longer sufficient to meet the contractual minimum purchase requirements. Of the total provision, $104m is classified as non-current at 30 June 2026 (refer to Note 15). Post-tax impairment and related charges attributable to CSL Limited shareholders were $4,808m, with $584m attributable to non-controlling interests (Note 1). Details of impairment indicators, key assumptions and sensitivities for material assets and CGUs are provided below. CSL Vifor Goodwill The Group recognised a full impairment charge of $1,700m in respect of goodwill allocated to the CSL Vifor CGU following a reassessment of the CGU's recoverable amount. The impairment was triggered by adverse changes in the commercial outlook across the CSL Vifor portfolio, including lower revenue forecasts for key products, product-specific impairments recognised during the year, heightened competitive and regulatory pressures resulting in a reduction in long-term growth assumptions. These factors reduced the forecast cash flows and recoverable amounts attributed to the underlying CSL Vifor product portfolio and, in turn, reduced the recoverable amount of the CGU to below its carrying value. In accordance with AASB 136, the impairment was allocated to goodwill, resulting in the full impairment of goodwill allocated to the CSL Vifor CGU at 30 June 2026. 100 100 Financial Report
RkJQdWJsaXNoZXIy MjE2NDg3