2021 Annual Report

Notes to the consolidated financial statements 30 June 2021 (continued) 1 Segment information (continued) (f) Segment liabilities A reconciliation of reportable segment liabilities to total liabilities is as follows: 2021 $'000 2020 $'000 Total liabilities for reportable segments 104,329 153,587 Unallocated liabilities: Deferred tax liabilities 108,556 141,787 Creditors and accruals of the parent entity 13,168 4,741 Provision for employee entitlements of the parent entity 5,796 4,779 Bank loans - 56,937 Corporate lease liabilities 5,054 5,390 Current tax liabilities 171,952 - Total liabilities as per the balance sheet 408,855 367,221 2 Revenue 2021 $'000 2020 $'000 From continuing operations Sales revenue from contracts with customers Sale of goods revenue 614,049 575,214 Shipping and insurance service revenue 5,810 4,925 619,859 580,139 Other revenue Interest revenue 2,898 6,096 Provisional pricing adjustments 48,982 12,617 51,880 18,713 Total revenue 671,739 598,852 (a) Recognition and measurement (i) Revenue from sale of goods Revenue from the sale of goods is recognised when control of the goods has passed to the buyer based upon agreed delivery terms. Sale of concentrates Revenue from the sale of concentrates is recognised when control has passed to the buyer based upon agreed delivery terms, generally being when the product is loaded onto the ship and bill of lading received, or delivered to the customer's premises. In cases where control of the product is transferred to the customer before shipping takes place, revenue is recognised when the customer has formally acknowledged their legal ownership of the product, which includes all inherent risks associated with control of the product. In these cases, the product is clearly identified and immediately available to the customer and this is when the performance obligation is met. The price to be received on sales of concentrate is provisionally priced and recognised at the estimate of the consideration receivable that is highly probable of not reversing by reference to the relevant contractual price and the estimated mineral specifications, net of treatment and refining charges where applicable. Subsequently, provisionally priced sales are repriced at each reporting period up until when final pricing and settlement is confirmed, with revenue adjustments relating to the quality and quantity of commodities sold being recognised in sales revenue. IGO Limited 6 Notes to the consolidated financial statements 30 Jun 2021 (continued) 2 Revenue (continued) (a) Recognition and me surement (continue ) Sale of concentrates (continued) Provisionally priced sales for which price finalisation is referenced to the relevant metal price index have an embedded commodity derivative. The embedded derivative is carried at fair value through profit or loss as part of trade receivables. The period between provisional pricing and final invoices is generally 60 days. (ii) Revenue from Services - Shipping and Insurance Sales of nickel and copper concentrates are on terms that include the Group being responsible for shipping and insurance costs. Shipping and insurance is a separate performance obligation from the sale of the commodity with the revenue allocated to shipping and insurance being recognised over the period of transfer to the customer. (iii) Provisional pricing adjustments The Group’s sales contracts may provide for provisional pricing of sales at the time the product is delivered to the vessel with final pricing determined using the index on or after the vessel’s arrival to the port of discharge. This provisional pricing relates to the quality and quantity of the commodity sold, which is included in sales revenue, and an embedded derivative relating to the pricing of the commodity sold. Provisional pricing adjustments relating to the embedded derivative are separately identified as movements in the financial instrument rather than being included within Sales revenue. The final pricing adjustment mechanism, being an embedded derivative, is separated from the host contract Notes to The Consolidated Financial Statements 30 June 2021 84 — IGO ANNUAL REPORT 2021