Notes to the Consolidated Financial Statements continued ANNUAL Report June 2025 Notes to the Consolidated Financial Statements 20 (p) Investment in Subsidiaries The parent entity’s investment in its subsidiaries is accounted for under the cost method of accounting in the Company’s financial statements included in Note 20. (q) Share Based Payments Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date. The fair value excludes the effect of non-market-based vesting conditions. Details regarding the determination of the fair value of equity-settled share-based transactions are set out in Note 30. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of the number of equity instruments that will eventually vest. At each reporting date, the Group revises its estimate of the number of equity instruments expected to vest as a result of the effect of non-market-based vesting conditions. The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to reserves. Equity-settled share-based payment transactions with parties other than employees are measured at the fair value of the good or services received, except where fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service. For cash-settled share-based payments, a liability is recognised for the goods or services acquired, measured initially at the fair value of the liability. At each reporting date until the liability is settled, and at the date of settlement, the fair value of the liability is remeasured, with any changes in fair value recognised in profit or loss for the year. (r) Sale and Leaseback The Group accounts for sale and leaseback transactions in accordance with IFRS 16. A transaction qualifies as a sale if it satisfies the requirements of IFRS 15 for the transfer of control. Where a sale is recognised, the Group derecognises the underlying asset and recognises a right-of-use asset and lease liability for the leaseback. The right-of-use asset is measured as the proportion of the previous carrying amount of the asset that relates to the right of use retained. Any gain or loss arising from the transaction is limited to the rights transferred to the buyer-lessor. If the transfer does not quality as a sale, the asset remains on the balance sheet and the proceeds are recognised as a financial liability. The Group discloses the terms and conditions of sale and leaseback transactions, including any gains or losses recognised, and whether the transaction involved related parties. (s) Critical Accounting Judgements, Estimates and Assumptions The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management reviews on an ongoing basis its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, which management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. 86 EQ Resources Limited Annual Report 2025
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