How to Write the Emissions Restatement Note Your...

The restatement note is the part of the annual report the auditor will spend the most time on. It is also the part ASIC's sustainability surveillance team will read first when a Group 1 entity refiles, and the part most likely to be drafted at 8pm the night before the audit committee meeting.

The structure of the note is not complicated. The discipline is.

The difference between a restatement note that survives surveillance and one that draws follow-up questions is rarely the writing. It is whether the underlying records can support each sentence. If you can't tie the corrected number back to a source document, an emission factor version, and a calculation path, the note is not defensible. So before drafting, the question is always: do we have the evidence to say what we're about to say.

This post is for the team drafting the document. If you haven't yet decided whether to restate, the restatement decision playbook and the materiality threshold post cover that ground. The assumption here is the decision is made.

The seven things every defensible restatement note must say

A restatement note under AASB S2 inherits its disclosure requirements from AASB 108 paragraph 49, applied to emissions estimates through AASB S2 paragraph 64. Pull the standard up beside the draft and tick the list off. Skipping any of these is how surveillance correspondence starts.

The seven items, in the order they should appear:

Nature of the error. What went wrong, and where in the data flow it went wrong. Not "an error was identified". Specifically: which scope, which category, which source.
Period or periods affected. Each reporting year, with the original figure and the restated figure, by scope.
Line-item amounts corrected, before and after. Numbers in tonnes CO2-e, with the variance shown both absolutely and as a percentage of the original total.
Cause analysis. Root cause, not symptom. "Wrong emission factor" is a symptom. "Stationary energy module was using AR5 GWPs after the NGA Factors 2024 update because the factor library was not patched" is a cause.
Why the error was not detected at the time. This is the question most weak restatement notes skip. ASIC will not.
How the error was discovered. Self-discovery, auditor-discovered, regulator-discovered, or whistleblower-discovered. The note should be factual about which.
What has been changed to prevent recurrence. Specific control changes, not "additional training has been provided".

If the note is missing any of these, send it back to the drafter before it goes to the audit committee.

Why "why not detected" is the hardest sentence to write

The original sustainability report was signed by directors and, where applicable, given limited assurance under ASSA 5010. If the error was inside a system that the assurance practitioner had walked through and signed off on, the question becomes uncomfortable: was the assurance scoped appropriately, or did the control fail.

The answer is almost never "the auditor missed it". The answer is usually that the limited-assurance procedures were not designed to catch this class of error, and that is a permitted outcome of a limited engagement. But the note still needs to say it. Wording that holds up:

The error originated in the [System / Process] which was within the scope of the limited-assurance engagement performed by [Practitioner] for the year ended [Date]. Limited-assurance procedures, by their nature, are not designed to identify all errors that would be detected under reasonable assurance. The Reporter and the Auditor have reviewed the relevant procedures and have updated the [Specific control or check] for future periods.

That sentence does three things. It accepts the error was inside the assurance perimeter. It names the limit of the engagement. It points to a specific control change. ASIC's RG 280 makes clear that directors are responsible for sustainability reporting systems and controls; pointing at the assurance scope without naming a control change reads like deflection.

NGER revised reports are a different document

A common drafting mistake is treating the NGER revised report and the AASB S2 restatement note as the same disclosure. They aren't.

The NGER revised report is a technical resubmission through the Clean Energy Regulator's EERS portal under the National Greenhouse and Energy Reporting Act 2007. It carries a methodology note in the submission itself, addressed to the Clean Energy Regulator. The audience is the regulator and the audit team running the NGER audit framework.

The AASB S2 restatement note sits in the annual report's comparative period restatement, under sustainability-related financial disclosures. The audience is investors, ASIC, the assurance practitioner, and the board. It travels with the financial statements.

The two notes must reconcile. The tonnes restated in one should match the tonnes restated in the other, scope by scope, year by year. But the tone and depth differ. The NGER methodology note is procedural and goes into method-tier transitions, equation choices, and source-document references. The AASB S2 note is investor-focused and goes into materiality, cause, control changes, and impact on disclosed targets.

If you're doing both at once, draft them in parallel and reconcile the numbers before either is finalised. We have seen reporters submit a revised NGER report that didn't match the figures in their restated annual report. That is the kind of thing that turns into surveillance correspondence on its own.

Quantification methodology: how you got there matters as much as where you landed

The corrected number isn't enough. The note has to explain how the corrected number was produced. There are three patterns:

The first is recomputation from source documents. The original calculation was wrong, the source records are intact, and you've recalculated using the correct factor or correct activity data. This is the cleanest case. The note says so and references the source documents.

The second is re-estimation using the same method but a corrected input. The factor was wrong, the activity data is fine. The recalculation uses identical methodology with the factor swapped. This is straightforward to disclose.

The third is methodology change. The original calculation used a method that has since been determined to be inappropriate, and the corrected calculation uses a different method entirely. This requires the most disclosure: the original method, the corrected method, why the change, and whether AASB S2 paragraph 21 (consolidation method changes) or paragraph 50 (changes in estimation method) applies.

The third pattern is the one where AASB S2 paragraph 64 leans most heavily on AASB 108. Read the paragraphs together before drafting.

Comparative period treatment

Under AASB S2 and AASB 108, the restated comparative is shown in the current-year report. So if you reported FY24 emissions of 145,000 tonnes CO2-e and the corrected figure is 158,000 tonnes, the FY25 annual report shows FY24 as 158,000 tonnes in the comparative column, with a note explaining the restatement.

Two things to be precise about. First, the original FY24 statement signed by directors at the time stands; you are not reissuing it. Section 1707D modified liability protection still applies to the original Group 1 disclosure as filed. Second, the restated comparative figure in the FY25 report is a separate director responsibility for the current reporting period. The audit committee paper should explicitly note both.

The disclosure table that goes into the note should show three columns: as originally reported, as restated, and the variance. By scope. Don't aggregate to a single total figure. Investors and ASIC will want to see whether the error sat in Scope 1, Scope 2 location-based, Scope 2 market-based, or Scope 3 by category. A single-line restatement reads as opaque.

A worked-format example

Below is a generic template showing the structure. The placeholder fields are deliberate.

Note [N] Restatement of comparative-period emissions

During the year ended [Date], the Reporter identified that [Description of error] resulted in [an overstatement / an understatement] of Scope [N] emissions of [X] tonnes CO2-e for the year ended [Comparative date], being [Y%] of the previously reported Scope [N] total.

The error originated in [Specific source system or process]. The cause was [Root cause statement]. The error was not detected at the time because [Reason, for example, the control point did not include a check on factor version, or the spreadsheet did not flag the input change].

The error was discovered through [Self-discovery mechanism / external trigger]. On discovery, the Reporter performed [Steps taken, recomputation, source-document review, sample check, full population check].

The Reporter has [recomputed / re-estimated] the affected emissions using [Methodology statement, naming any change in method per AASB S2 paragraph 21]. The comparative-period emissions for the year ended [Comparative date] are restated as follows:

That structure repeated for each affected period and each affected scope is the spine of a defensible note. Fill the placeholders with verifiable facts, not narrative.

What ASIC reads first

In our reading of RG 280 and the surveillance posture set out by ASIC's sustainability reporting enforcement priorities, two parts of the note attract the most attention. The cause analysis and the prevention measures.

If the cause analysis reads "human error" and the prevention reads "additional training will be provided", you should expect follow-up correspondence. Those phrases are surveillance triggers because they signal that the reporter has not yet identified what actually broke. ASIC's view, consistent with the directors' responsibility framework in RG 280, is that climate-related disclosures must be supported by systems and controls. A control failure dressed up as a training failure is the same control failure, repeated next year.

Specific prevention language that holds up:

Version-locking of emission factor libraries with sign-off at period close
Factor change notifications routed through the sustainability controller before the calculation runs
Source-document attribution required at the calculation level, not the aggregate level
Period locking after [Date], with break-glass procedure for in-period corrections
Independent sample check of [N] transactions per quarter against source documents

These are control statements. They name a control, name an owner implicitly, and are testable by an assurance practitioner. "More training" is none of these.

Audit committee paper that goes alongside the note

The restatement note is the public document. The audit committee paper is the internal document the directors will use to sign the note off. Both need to exist.

The paper should cover: the materiality assessment that led to the restatement (referenced to the materiality framework, not just a number), the risk of recurrence stated as a control assessment, the control changes implemented and when they go live, the assurance practitioner's view on the restatement and the prevention measures, and the management letter response if one is being issued.

If any of the above is missing from the paper, the committee should not be asked to approve the note yet. We see drafts arrive at committee with the note ready but the management letter response not yet drafted. That is the wrong order. The response comes before the note is finalised, because the response shapes what the prevention section can credibly say.

The audit trail makes or breaks the note

Every sentence in a restatement note is a claim. Each claim has to be supported by something that survives an assurance walkthrough.

This is where the underlying record-keeping discipline matters more than the drafting. The reporter has to be able to show, for the affected period: the source document used, the emission factor and factor library version applied, the calculation path, who entered the data, when, and who approved the period close. If any of those are missing, the claim sitting on top of them in the note is hard to defend.

This is the reason we built period locking and emission factor versioning into Carbonly from the start. Period locking means once a reporting period is closed, the calculations are immutable; any in-period correction creates a new versioned entry rather than overwriting. Factor versioning means every calculation references the factor version active at the time of the original calculation, not the current factor library. Source-document attribution means every emission line carries a link back to the invoice, docket, or meter read it came from. Those three together are what makes a restatement note defensible because they let the drafter quote specific numbers, specific factor versions, and specific source documents without having to reconstruct them by hand.

We are not selling reconstruction. Reconstruction is what you do when you don't have these things. Reconstruction projects after the error is found run weeks to months and produce notes that lawyers and assurance practitioners are nervous about. The discipline is to have the record before you need it.

The director responsibility line

The note is signed by directors. The directors' declaration covers the restated comparative as a current-year disclosure. The wording in the directors' declaration should explicitly reference the restatement and the basis on which directors are satisfied the restated figures are not materially misstated. Boilerplate director declarations that don't acknowledge the restatement read as careless when the rest of the report describes a restatement event.

What to do this week if you're drafting

Pull AASB 108 paragraph 49 and AASB S2 paragraph 64 up beside the draft. Run the seven-item checklist against the current version of the note. Reconcile the figures to the NGER revised report if one is being filed. Get the assurance practitioner's preliminary view on the cause and prevention sections before the audit committee meeting, not after. And confirm with the company secretary that the directors' declaration wording acknowledges the restatement specifically.

The note will be read in detail. The discipline is to write it as if it already has been.

If you'd like to see how period locking, factor versioning, and source-document attribution work together in practice, write to us at hello@carbonly.ai or join the waitlist.

How to Write the Emissions Restatement Note Your Auditor Will Accept