ANNUAL REPORT June 2026 Notes to the Consolidated Financial Statements (c) Impairment of non-financial assets The consolidated entity assesses impairment of non-financial assets at each reporting date by evaluating conditions specific to the consolidated entity and to the particular asset that may lead to impairment. If an impairment trigger exists, the recoverable amount of the asset is determined. This involves fair value less costs to sell or value-in-use calculations, which incorporate a number of key estimates and assumptions. Refer to Note 10 for further detail regarding judgements made when assessing impairment of plant and equipment and deferred exploration and evaluation costs and determining their recoverable amount. (d) Measurement of fair values When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows: ▪ Level 1: quoted prices (unadjusted in active markets for identical assets or liabilities. ▪ Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, directly (i.e. as prices) or indirectly (i.e. derived from prices). ▪ Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). If the inputs used to measure the fair value of an asset or liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred. Further information about the assumptions made in measuring fair values is included in the following notes: Note 8(c) – Financial Liabilities; and Note 19 – Financial Risk Management Objectives and Policies. (e) Classification of share-based payment settlement as an equity transaction During the period, the Group identified that options issued to third parties in connection with capital raising and funding arrangements had previously been accounted for as share-based payments within the scope of AASB 2. Management exercised judgement in reassessing these arrangements and concluded that, as the options were issued in connection with a capital raising or funding arrangement rather than as consideration for goods or services, they fall outside the scope of AASB 2 and are more appropriately accounted for as a cost of raising equity under AASB 132. This judgement resulted in the correction of a prior period error of A$4.8 million set out in note 1(e). (f) Revenue recognition - principal versus agent and timing of control transfer The Group exercises judgement in determining the point in time at which control of tungsten concentrate transfers to the customer, having regard to the relevant contractual terms and Incoterms, and in assessing whether freight and logistics services performed after control of the concentrate has transferred represent a distinct performance obligation to which a separate transaction price is allocated, or whether the Group acts as principal or agent in arranging those services. These assessments directly affect the timing and amount of revenue recognised in each reporting period. Refer to the revenue recognition accounting policy in Note 1(s). 66 EQ Resources Limited Annual Report 2026 Notes to the Consolidated Financial Statements continued
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