ANNUAL Report June 2025 Notes to the Consolidated Financial Statements 12 (f) Property, Plant and Equipment Recognition and Measurement Property, Plant and Equipment Property, plant and equipment are stated at cost less accumulated depreciation and any impairment in value. Cost is the fair value of consideration given to acquire the asset at the time of its acquisition, or construction and includes the direct costs of bringing the asset to the location and the condition necessary for operation. Right-of-use assets are measured at cost, less accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. Right-of-use assets are presented within the category of property, plant and equipment according to the nature of the underlying asset leased. Recoverable Amount of Assets At each reporting date, the Group assesses whether there is any indication that an asset may be impaired. Where an indicator of impairment exists, the Group makes a formal estimate of the recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount. Recoverable amount is the greater of fair value less costs to sell and value in use. Impairment The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. An item of plant and equipment is derecognised upon disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the income statement in the period the item is derecognised. Exploration, Evaluation, Development and Restoration Costs Exploration and Evaluation Exploration and evaluation expenditure incurred by or on behalf of the Company is accumulated separately for each area of interest. Such expenditure comprises net direct costs and an appropriate portion of related overhead expenditure but does not include general overheads or administrative expenditure not having a specific connection with a particular area of interest. Exploration and evaluation costs in relation to separate areas of interest for which rights of tenure are current are brought to account in the year in which they are incurred and carried forward provided that: ▪ such costs are expected to be recouped through successful development and exploitation of the area, or alternatively through its sale; or ▪ exploration and/or evaluation activities in the area have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves. Once a development decision has been taken, all past and future exploration and evaluation expenditure in respect of the area of interest is aggregated within costs of development. Impairment The Directors assess at each reporting date whether the above carry forward criteria are met for exploration and evaluation costs. Accumulated costs in respect of areas of interest are written off or a provision made in profit or loss when the above criteria do not apply or when the Directors assess that the carrying value may exceed the recoverable amount. The costs of productive areas are amortised over the life of the area of interest to which such costs relate on the production output basis, provisions would be reviewed and if appropriate, written back. 78 EQ Resources Limited Annual Report 2025 Notes to the Consolidated Financial Statements continued
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