Annual Financial Statements for the year ended 30 June 2021 0 - Book - Page 78
SASOL LIMITED GROUP
Operating and other activities continued
10 Remeasurement items affecting operating profit continued
Remeasurement items are amounts recognised in profit or loss relating to any change (whether realised or unrealised) in the
carrying amount of non-current assets or liabilities that are less closely aligned to the normal operating or trading activities of
the group such as the impairment of non-current assets, profit or loss on disposal of non-current assets including businesses and
equity accounted investments, and scrapping of assets. The group’s non-financial assets, other than inventories and deferred tax
assets, are reviewed at each reporting date or whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable, to determine whether there is any indication of impairment. An impairment test is performed on all
goodwill, intangible assets not yet in use and intangible assets with indefinite useful lives at each reporting date.
The recoverable amount of an asset is defined as the amount that reflects the greater of the fair value less costs of disposal
and value-in-use that can be attributed to an asset as a result of its ongoing use by the entity. Value-in-use is estimated using a
discounted cash flow model. The future cash flows are adjusted for risks specific to the asset and is adjusted where applicable to
take into account any specific risks relating to the country where the asset or cash-generating unit is located. The rate applied in
each country is reassessed each year. The recoverable amount may be adjusted to take into account recent market transactions
for a similar asset.
Some assets are an integral part of the value chain but are not capable of generating independent cash flows because there is no
active market for the product streams produced from these assets, or the market does not have the ability to absorb the product
streams produced from these assets or it is not practically possible to access the market due to infrastructure constraints that
would be costly to construct. Product streams produced by these assets form an input into another process and accordingly
do not have an active market. These assets are classified as corporate assets in terms of IAS 36 when their output supports the
production of multiple product streams that are ultimately sold into an active market.
The group’s corporate assets are allocated to the relevant cash-generating unit based on a cost or volume contribution metric.
Costs incurred by the corporate asset are allocated to the appropriate cash generating unit at cost. If there is an indication that a
corporate asset may be impaired, then the recoverable amount is determined for the cash-generating unit to which the corporate
In Southern Africa, the coal value chain starts with feedstock mined in Secunda and Sasolburg and continues along the integrated
processes of the operating business units, ultimately resulting in fuels and chemicals-based product lines. Similarly, the gas value
chain starts with the feedstock obtained in Mozambique and continues along the conversion processes in Secunda and Sasolburg,
ultimately resulting in fuels and chemicals-based product lines.
The groups of assets which support the different product lines, including corporate asset allocations, are considered to be
separate cash-generating units.
In the US, the ethylene value chain results in various chemicals-based product lines, sold into active markets. The assets which
support the different chemicals-based product lines, including corporate asset allocations, are considered to be separate cashgenerating units.
In Europe, the identification of separate cash-generating units is based on the various product streams that have the ability to be
sold into active markets by the European business units.
Certain products are sometimes produced incidentally from the main conversion processes and can be sold into active markets.
When this is the case, the assets that are directly attributable to the production of these products, are classified as separate
cash-generating units. The cost of conversion of these products is compared against the revenue when assessing the asset for
Exploration assets are tested for impairment when development of the property commences or whenever facts and
circumstances indicate impairment. An impairment loss is recognised for the amount by which the exploration assets carrying
amount exceeds their recoverable amount.
Sasol Annual Financial Statements 2021