180 Annual Report 2025 NOTES TO THE FINANCIAL STATEMENTS 1 GENERAL INFORMATION (CONTINUED) 1.4 Critical accounting judgements and key sources of estimation uncertainty (continued) (ii) Key sources of estimation uncertainty Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment to the carrying amount of assets and liabilities within the next financial year are discussed below. Impairment of non-financial assets The Group assesses whether there are any indicators of impairment for all non-financial assets at each reporting date. Non-financial assets are tested for impairment when there are indicators that the carrying amounts may not be recoverable. When value-in-use calculations are undertaken, management must estimate the expected future cash flows from the asset or cash-generating unit (“CGU”) and choose a suitable discount rate in order to calculate the present value of those cash flows. Judgement and estimates are required in the determination of appropriate inputs to derive at forecasted cash flows and the discount rate. • Exploration and evaluation assets Note 3 • Oil and gas properties Note 4 • Goodwill and intangible assets Note 5 • Subsidiaries Note 7 Depletion of oil and gas properties Oil and gas properties are mainly depleted on a unit of production basis at a rate calculated by reference to proved and probable reserves and incorporating the estimated future cost of developing and extracting those reserves. Future development costs are estimated using assumptions as to the number of wells required to produce those reserves, the cost of the wells, future production facilities and operating costs; together with assumptions on oil and gas realisations based on the approved field development plans. The carrying amount of the Group’s oil and gas properties are disclosed in Note 4 to the financial statements. Provisions Estimates of the Group’s obligations arising from exploration drilling rehabilitation that exist as at the reporting date may be affected by future events which cannot be predicted with any certainty. The assumptions and best estimates in determining these provisions are made based on management’s judgement and experience and therefore, future exploration drilling rehabilitation obligations and expenses could be revised. The carrying amount of the Group’s provisions are disclosed in Note 19 to the financial statements. Useful life of development costs Management reviews the amortisation period and method for intangible assets with finite useful lives at least at each financial year end. As a result of current year developments in the commercial drone market conditions and evolving regulatory standards, management reassessed the useful life of development costs previously amortised over 10 years and has determined the remaining useful life of the intangible assets to be three years. The change in accounting estimate has been applied prospectively from 1 January 2025. The effect on current and future periods is expected to be an increase in annual amortisation expense of US$958,000 as compared to the previous estimate. The carrying amount of the Group’s development costs are disclosed in Note 5 to the financial statements.
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