Page 90 - Sundance Resources Ltd Annual Report 2013

88 SUNDANCE RESOURCES LIMITED ANNUAL REPORT 2013
NOTES TO THE
FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 30 JUNE 2013
i) Property, plant and equipment
Buildings, plant & equipment, IT & communications and furniture & fittings are stated at cost less accumulated
depreciation and impairment. Construction in progress is stated at cost. Cost includes expenditure that is directly
attributable to the acquisition or construction of the item. In the event that settlement of all or part of the purchase
consideration is deferred, cost is determined by discounting the amounts payable in the future to their present
value as at the date of acquisition.
Depreciation is provided on property, plant and equipment, including freehold buildings but excluding land.
Depreciation is calculated on a straight-line basis so as to write off the net cost or other revalued amount of each
asset over its expected useful life to its estimated residual value. Leasehold improvements are depreciated over
the period of the lease or estimated useful life, whichever is the shorter, using the straight-line method.
The estimated useful lives, residual values and depreciation method are reviewed at the end of each
annual reporting period, with the effect of any changes recognised on a prospective basis.
The gain or loss arising on disposal or retirement of an item of property, plant and equipment is determined as
the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit
or loss.
The following useful lives are used in the calculation of depreciation:
Buildings – 15 years
Plant & equipment – 3 to 15 years
IT& communications – 2 to 10 years
Furniture & fittings – 3 to 15 years
j) Intangible assets
Intangible assets acquired separately
Intangible assets acquired separately are recorded at cost less accumulated amortisation and impairment.
Amortisation is charged on a straight-line basis over their estimated useful lives. The estimated useful life and
amortisation method is reviewed at the end of each annual reporting period, with any changes in
these accounting estimates being accounted for on a prospective basis.
The following useful lives are used in the calculation of amortisation - Patents & licences 10 – 20 years
k) Impairment of long-lived assets excluding goodwill
At each reporting date, the Group reviews the carrying amounts of its assets to determine whether there is any
indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset
does not generate cash flows that are independent from other assets, the Group estimates the recoverable
amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of
allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise
they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation
basis can be identified.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested
for impairment annually and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use,
the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset for which the
estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount,
the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss
is recognised immediately in profit or loss, unless the relevant asset is carried at revalued amount, in which case
the impairment loss is treated as a revaluation decrease.
Note 2. SIGNIFICANT ACCOUNTING POLICIES (continued)
Critical accounting judgements and the key sources
of estimation uncertainty (continued)