Page 87 - Sundance Resources Ltd Annual Report 2013

SUNDANCE RESOURCES LIMITED ANNUAL REPORT 2013 85
NOTES TO THE
FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 30 JUNE 2013
In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s
functional currency are recorded at the rates of exchange prevailing in the month of the transactions. At each
balance sheet date, monetary items are translated at the rates prevailing at the balance sheet date.
Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences are recognised in profit or loss in the period in which they arise except for:
• exchange differences on foreign currency borrowing which relate to assets under construction for future
productive use, which are included in the cost of those assets where they are regarded as an adjustment
to interest costs on foreign currency borrowings; and
• exchange differences on monetary items receivable from or payable to a foreign operation for which
settlement is neither planned or likely to occur, which form part of the net investment in a foreign operation,
and which are recognised in the foreign currency translation reserve and recognised in the profit or loss on
disposal of the net investment.
On consolidation, assets and liabilities of the Group’s foreign operations are translated into Australian dollars at
exchange rates prevailing at the balance date. Income and expense items are translated at the average exchange
rates for the period, unless exchange rates fluctuate significantly during the period, in which case exchange rates at
the dates of the transactions are used. Exchange differences arising, if any, are recognised in other comprehensive
income and accumulated in equity (attributed to non-controlling interests as appropriate). Such exchange differences
are recognised in profit or loss in the period in which the foreign operation is disposed. Any exchange differences
that have previously been attributed to non-controlling interests are derecognised but they are not classified to
profit or loss.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity on or after the date of the transition to
Australian Accounting Standards are treated as assets and liabilities of the foreign entity and translated at exchange
rates prevailing at the reporting date.
c) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of Goods and Services Tax (‘GST’), except:
i) where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of
the cost of acquisition of the asset or as part of an item of the expense; or
ii) for receivables and payables which are recognised inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of the
receivables or payables. Cash flows are included in the statement of cash flows on a gross basis. The GST
component of cash flows arising from investing and financing activities, which is recoverable from, or payable
to, the taxation authority, is classified within operating cash flows.
d) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Interest revenue is recognised
when it is probable that the economic benefits will flow to the Group and the amount of revenue can be
measured reliably. Interest revenue is accrued on a time basis, by reference to the principal outstanding and
at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts
through the expected life of the financial asset to that asset’s net carrying amount on initial recognition.
e) Share-based payments
Equity-settled share-based payments with employees and others providing similar services are measured at the
fair value of the equity instrument at the grant date. Fair value is measured by use of a Black Scholes or binomial
model. The expected life used in the model has been adjusted, based on management’s best estimate, for the
effects of non-transferability, exercise restrictions, and behavioural considerations. Further details on how the fair
value of equity-settled share-based transactions have been determined can be found in Note 26.
Note 2. SIGNIFICANT ACCOUNTING POLICIES (continued)
Critical accounting judgements and the key sources of estimation
uncertainty (continued)