80 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KAZIA THERAPEUTICS LIMITED CONTINUED FINANCIAL REPORT 2 discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this matter. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Material uncertainty related to going concern section, we have determined the matters described below to be the key audit matters to be communicated in our report. Valuation of Intangible Assets Key audit matter How the matter was addressed in our audit The Group carries in its statement of financial position intangible assets relating to: the Licensing Agreement, which grants the Group the right to develop and commercialise the paxalisib molecule; and the Licensing Agreement, which grants the Group the right to develop and commercialise the EVT801 molecule. As disclosed in Note 14, the paxalisib Licensing Agreement has a carrying value of $9,157,060 (2022: $10,241,444) and the EVT801 Licensing Agreement has a carrying value of $8,112,372 (2022: $8,897,448). Per Note 2, these assets are amortised over the remaining life of the underlying patents at the acquisition date, being 15 years and 12.5 years respectively. AASB 136 Impairment of Assets requires an entity to assess at the end of each reporting period whether there is any indication that an asset may be impaired. The entity shall estimate the asset’s recoverable amount if any indication exists. This is a key audit matter due to the materiality of the amounts and the high degree of management judgement required to assess whether there are impairment indicators as disclosed in Note 3. To address the key audit matter, our procedures included, amongst others: • Obtaining an understanding of and evaluating managements process and controls relating to the identification of impairment indicators; • Obtaining and critically assessing managements’ position paper documenting considerations of the existence of impairment indicators; • Enquiring of management and managements’ internal experts in relation to the science and potential for existence of impairment indicators; • Assessing the completeness, accuracy and reasonability of managements’ assessment of impairment indicators against the requirements of IAS 36 Impairment of Assets as well as in relation to external data and findings from enquiries of management and their experts; • Assessing the reasonability of the useful life of the intangible assets; • Assessing the impact of the EVT 801 prior period error on the current and prior period financial statements; • Checking mathematical accuracy of the accumulated amortization and amortization charge for the year;
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