Page 91 - Sundance Resources Ltd Annual Report 2013

SUNDANCE RESOURCES LIMITED ANNUAL REPORT 2013 89
NOTES TO THE
FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 30 JUNE 2013
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is
increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying
amount does not exceed the carrying amount that would have been determined had no impairment loss been
recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised
immediately in profit or loss, unless the relevant asset is carried at fair value, in which case the reversal of the
impairment loss is treated as a revaluation increase.
l) Employee Benefits
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave, long
service leave, and sick leave when it is probable that settlement will be required and that they are capable of
being measured reliably.
Liabilities recognised in respect of employee benefits expected to be settled within 12 months, are measured at
their nominal values using the remuneration rate expected to apply at the time of settlement.
Liabilities recognised in respect of employee benefits which are not expected to be settled within 12 months are
measured as the present value of the estimated future cash outflows to be made by the Group in respect
of services provided by employees up to reporting date.
Contributions to defined contribution benefit plans are recognised as an expense when employees have
rendered service entitling them to the contributions.
m) Leasing
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and
rewards of ownership to the lessee. All other leases are classified as operating leases.
Operating lease payments are recognised as an expense on a straight line basis over the lease term, except
where another systematic basis is more representative of the time pattern in which economic benefits from the
leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense
in the period in which they are incurred.
n) Critical accounting estimates and judgements
Significant accounting judgements
The directors evaluate the estimates and judgements incorporated into the financial report based on historical
knowledge and best available current information. Estimates assume a reasonable expectation of future events
and are based on current trends and economic data, obtained both externally and within the group.
Exploration and evaluation assets
The Group’s accounting policy for exploration and evaluation expenditure is set out below. The application of
this policy necessarily requires management to make certain estimates and assumptions as to future events
and circumstances, in particular, the assessment of whether economic quantities of reserves are found. Any
such estimates and assumptions may change as new information becomes available. If, after having capitalised
expenditure under this policy, the Directors conclude that the Group is unlikely to recover the expenditure by
future exploitation or sale, then the relevant capitalised amount will be written off to the income statement.
Capitalised mine development assets
The Group’s accounting policy for capitalised mine development is set out below. The application of this
policy necessarily requires management to make certain estimates and assumptions as to future events and
circumstances, in particular, the assessment of whether economic quantities of reserves are found. Any such
estimates and assumptions may change as new information becomes available. If, after having capitalised
expenditure under this policy, the Directors conclude that the Group is unlikely to recover the expenditure by
future exploitation or sale, then the relevant capitalised amount will be written off to the income statement.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined by an external valuer using
a binomial model, using the assumptions detailed in Note 25 Share Based Payments.
Note 2. SIGNIFICANT ACCOUNTING POLICIES (continued)
Critical accounting judgements and the key sources
of estimation uncertainty (continued)