Spend-based means you calculate emissions from money spent, using a factor per dollar. Activity-based means you calculate from a physical quantity, such as litres, kilowatt hours or tonne-kilometres.

AASB S2 does not name a required method for each Scope 3 category. It requires you to disclose the method you used and to explain it.

Use spend-based for your first inventory across all material Scope 3 categories.

Your general ledger already covers every supplier you paid. It gives you complete coverage in one pass, and completeness matters more in a first year than precision does.

An inventory that covers every category roughly is more defensible than one that covers three categories precisely and leaves the rest out.

Move a category to activity data when two things are true: the category is large, and the physical data exists.

Activity data is worth the effort in these cases:

Leave a category spend-based when the physical data does not exist, or when the category is small enough that the difference does not move your total.

An assurer does not reject spend-based data. Assurers ask three things:

A spend-based category with a documented reason passes. An activity-based category with no traceable source does not.

If you have activity data for part of a category and spend data for the rest, you can use both. Exclude the spend for the sources you calculated from activity data, so the same emissions are not counted twice.

See Do not count the same emissions twice.

For each material category, record the method you used and why. This goes into your Basis of Preparation.

If you change method between years, record that too, and state the effect on comparability.