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Inpex : Consolidated Financial Statements For the year ended December 31, 2025Open a PDF
Inpex : Consolidated Financial Statements For the year ended December 31, 2025Open a
About this update from Inpex Corporation
Consolidated Financial Statements For the year ended December 31, 2025 INPEX CORPORATION Independent Auditor's Report The Board of Directors INPEX CORPORATION The Audit of the Consolidated Financial Statements Opinion We have audited the accompanying consolidated financial statements of INPEX CORPORATION and its subsidiaries (the Group), which comprise the consolidated statement of financial position as at December 31, 2025, and the consolidated statements of profit or loss, comprehensive income, changes in equity, and cash flows for the year then ended, and notes to the consolidated financial statements. In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2025, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with IFRS Accounting Standards. Basis for Opinion We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Japan, including those applicable to audits of financial statements of public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of the audit of the consolidated financial statements as a whole, and in forming the auditor's opinion thereon, and we do not provide a separate opinion on these matters. Impairment assessment for non-financial assets related to the Ichthys LNG Project Description of Key Audit Matter Auditor's Response INPEX CORPORATION ("the Company") recorded oil and gas assets of 3,888,982 million yen in the consolidated statement of financial position as of December 31, 2025. As described in Note 4 to the consolidated financial statements "Critical accounting estimates and judgments," oil and gas assets related to the Ichthys LNG Project held through INPEX Holdings Australia Pty Ltd. ("IHA"), a consolidated subsidiary, amounted to 1,772,903 million yen. Also, investments accounted for using the equity method of 751,515 million yen in Ichthys LNG Pty Ltd ("ILNG"), a joint venture, were recorded. The balance of oil and gas assets held by ILNG included in the investment in ILNG amounted to 3,036,401 million yen (calculated based on the Company's equity interest of 67.82%). As a result of the Group's assessment for indications of impairment relevant to the Ichthys LNG Project considering key assumptions, operating conditions and other relevant factors that management has applied in determining this project's net cash flows during the fiscal year, the Company assessed that there were no indications of impairment identified for non-financial assets related to the Ichthys LNG Project. We performed the following audit procedures in response to the impairment assessment for non-financial assets related to the Ichthys LNG Project. We evaluated management's assumptions regarding future crude oil prices by comparing them with estimates prepared by external energy-related market research organizations and with management's assumptions used in the previous fiscal year. We discussed the operating conditions, including reserves, operating expenses and development costs, with management and inspected board minutes and other relevant documents. We evaluated management's assumptions regarding reserves, operating expenses, development costs and internal carbon pricing used in determining the project's net cash flows by discussing them with management and comparing them with assumptions used in the previous fiscal year. We evaluated management's assumptions regarding operating expenses by comparing them with estimates used in the previous fiscal year. We verified future crude oil prices and discount rates in collaboration with our network firm's valuation specialists. We assessed the competence, capabilities, and objectivity of internal experts utilized by management in estimating reserves. We evaluated management's assumptions regarding reserves, which are estimated by internal experts and had been subject to certification by external experts in the past, by comparing actual production results for the year ended December 31, 2025, with production estimates made in previous years. In concluding that no impairment indications existed, the Company primarily assessed that the project's net cash flows have not deteriorated significantly. The key assumptions used in determining the project's net cash flows include future crude oil prices, reserves, operating expenses, development costs, internal carbon pricing and discount rates. Among these assumptions, there is a high level of uncertainty in the estimates of future crude oil prices, reserves, operating expenses, development costs and internal carbon pricing, given the long period from the exploration and development phase to the recovery of the investment through production and sales, and there is a possibility that preferences for low-carbon energy may increase during the transition to net-zero. Also, with respect to the estimation of the discount rate, a high level of expertise is required in selecting the valuation methodology and input data. Accordingly, the impairment assessment for non-financial assets related to the Ichthys LNG Project involves significant judgment and estimation by management. The balance of oil and gas assets held by IHA, a consolidated subsidiary, accounts for 45% of the oil and gas assets reported in the consolidated statement of financial position. Furthermore, when aggregated with the investment in ILNG accounted for using the equity method, the total amount related to the Ichthys LNG Project is material. In addition, given the long operating life of the Ichthys LNG Project, potential impacts arising from changes in key assumptions such as future crude oil prices could be significant. Therefore, the impairment assessment for non-financial assets related to the Ichthys LNG Project requires careful consideration. Based on the above, we determined that the impairment assessment for non-financial assets related to the Ichthys LNG Project was significant in our audit of the consolidated financial statements for the current fiscal year, and was therefore identified as a key audit matter. - We performed sensitivity analyses of the project's net cash flows to assess the impact of reasonably possible changes and certain stress factors, based on available information on future crude oil prices, discount rates, operating expenses and development costs. Other Information The other information comprises the information included in the disclosure document that contains audited consolidated financial statements but does not include the consolidated financial statements and our auditor's report thereon. We have concluded that the other information does not exist. Accordingly, we have not performed any work related to the other information Responsibilities of Management, Audit & Supervisory Board Members and the Audit & Supervisory Board for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with IFRS Accounting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going concern and disclosing, as required by IFRS Accounting Standards, matters related to going concern. Audit & Supervisory Board Members and the Audit & Supervisory Board are responsible for overseeing the Group's financial reporting process. Auditor's Responsibilities for the Audit of the Consolidated Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. Consider internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances for our risk assessments, while the purpose of the audit of the consolidated financial statements is not expressing an opinion on the effectiveness of the Group's internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.