Grant Thornton Audit Pty Ltd Key audit matter How our audit addressed the key audit matter Carrying value of intangible assets - refer to note 2 (e) (xi) and note 10 At 30 June 2024, the carrying value of intangible assets on the balance sheet included $246,937 for the hTERT asset; $8,031,407 for the NETs asset and $1,150,000 for the SubB2M asset. In accordance with AASB 136 Impairment of Assets (AASB 136), management has performed impairment testing on these assets. This as a key audit matter due to the significant judgements and estimation uncertainty in determining the carrying value of these assets. Our procedures included, amongst others: • Updating our understanding of management’s process and controls for assessment of impairment; • Evaluating whether the relevant controls are designed effectively and performing a walkthrough to determine if they have been implemented; • Reviewing management’s assessment of impairment indicators; • Obtaining management’s impairment calculations and, where required evaluating the methodology and assumptions against the requirements of AASB 136; • Challenging the appropriateness of the assumptions used in the models and testing the mathematical accuracy of the calculations; • Validating the appropriateness of management’s analysis of the recoverable amount; and • Evaluating the adequacy of disclosures in the financial statements. Research and development (R&D) tax incentive - refer to note 2 (e) (iii), note 4 and note 8 For the year ended 30 June 2024, the Group recorded a research and development tax incentive refund of $1,026,444 in the consolidated statement of comprehensive income. The Group was assisted by a specialist with the review of the eligibility of expenses and with the lodgement of the R&D tax incentive claim. This is a key audit matter as there is inherent subjectivity involved in the Group's judgements in relation to the calculation and recognition of the R&D tax incentive income and receivable, with several assumptions made in determining the eligibility of claimable expenses. Our procedures included, amongst others: • Evaluating the competence, capabilities and qualification of management’s expert to review the calculation; • Reviewing the reasonableness of the assumptions in the calculation; • Testing the mathematical accuracy of the calculation; • Agreeing a sample of expenses to the underlying supporting documents and reviewing for reasonableness; • Considering the nature of the expenses against the eligibility criteria of the R&D Tax Incentive Scheme to form a view about whether the expenses included in the estimate were likely to meet the eligibility criteria; • Inspecting copies of relevant correspondence with AusIndustry and the ATO related to the claim; • Using an internal R&D specialist to review the claim prepared by management’s specialist; and • Evaluating the adequacy of the disclosures in the financial statements. Independent Auditor’s Report continued 66 INOVIQ Limited
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