Page 86 - Sundance Resources Ltd Annual Report 2013

84 SUNDANCE RESOURCES LIMITED ANNUAL REPORT 2013
NOTES TO THE
FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 30 JUNE 2013
Note 2. SIGNIFICANT ACCOUNTING POLICIES (continued)
Basis of Preparation of Accounts
The financial report has been prepared on an accruals basis and is based on historical cost, except for the
revaluation of certain financial instruments that are measured at fair values as explained in the accounting policies
below. Costs are based on the fair values of the consideration given in exchange for assets. All amounts are
presented in Australian dollars, unless otherwise stated.
Critical accounting judgements and the key sources of estimation uncertainty
In the application of the Consolidated Entity’s accounting policies, management is required to make judgements,
estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on historical experience and other factors that are
considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions
are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects both current and future periods. Refer to Note 2(n) for further details.
Accounting Policies.
a) Basis of Consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities
controlled by the Company (referred to as ‘the Group’ in these financial statements). Control is achieved where
the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits
from its activities.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated income
statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting
policies into line with those used by other members in the Group.
All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.
Non-controlling interests in the net assets (excluding goodwill) of the consolidated subsidiaries are identified
separately from the Group’s equity therein. Non-controlling interests consist of the fair value of those interests at
the date of the original business combination and the non-controlling interest’s share of the changes in equity
since the date of the combination. Total comprehensive income is attributed to non-controlling interests even
if this results in the non-controlling interests having a deficit balance.
Changes in the Group’s interests in subsidiaries that do not result in a loss of control are accounted for as equity
transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to
reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which
the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised
directly in equity and attributed to owners of the Company.
When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference
between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest
and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any
non-controlling interests. Amounts previously recognised in other comprehensive income in relation to the
subsidiary are accounted for (i.e. reclassified to profit or loss or transferred directly to retained earnings) in the
same manner as would be required if the relevant assets or liabilities were disposed of. The fair value of any
investment retained in the former subsidiary at the date when control is lost is regarded as the fair value of initial
recognition for subsequent accounting under AASB 139 Financial Instruments: Recognition and Measurement
or, when applicable, the cost on initial recognition of an investment in an associated or jointly controlled entity.
b) Foreign currency
The individual financial statements of each group entity are presented in its functional currency being the
currency of the primary economic environments in which the entity operates. For the purposes of the
consolidated financial statements, the results and financial position of each entity are expressed in Australian
dollars, which is the functional currency of Sundance Resources Limited and is the presentation currency for
the consolidated financial statements.