Key Audit Matters (continued) Key Audit Matter How Our Audit Addressed the Key Audit Matter Exploration and evaluation assets As at 30 June 2024, the carrying value of exploration and evaluation assets was $ 44,894,829. In accordance with AASB 6 Exploration for and Evaluation of Mineral Resources, the Group is required to assess at each reporting date if there are any triggers for impairment which may suggest the carrying value is in excess of the recoverable value. The process undertaken by management to assess whether there are any impairment triggers in each area of interest involves an element of management judgement. This area is a key audit matter due to the significant judgement involved in determining the existence of impairment triggers. During our audit, we assessed management assumptions when capitalising exploration assets and reviewing for indicators of impairment. Our procedures included: • Reviewing managements reconciliation of capitalised exploration and evaluation expenditure and ensuring it agrees to the general ledger; • Assessing the impact of farm-out agreements including recovery of prior exploration expenditure in relation to Cuba Block 9; • Evaluating costs capitalised during the period and testing on a sample basis; • Enquiring of management regarding their intentions to carry out exploration and evaluation activity in the relevant exploration areas; • Determining whether any data exists to suggest that the carrying value of these exploration and evaluation assets are unlikely to be recovered through development or sale; • Assessing management judgement in impairment assessment; and • Reviewing the appropriateness of the related disclosures within the financial statements. There were no restrictions on our reporting of Key Audit Matters. Independent Auditor’s Report continued 72 Melbana Energy Limited Annual Report 2024
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