103 / 164
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
Annual Report 2015 103
Notes to the consolidated financial statements
30 June 2015
2 Summary of significant accounting policies (continued)
(n) Property, plant and equipment (continued)
Depreciation periods are primarily:
Buildings
5 - 10 years
Mining plant and equipment
2 - 5 years
Motor vehicles
3 - 8 years
Furniture and fittings
3 - 10 years
Leased assets
3 - 4 years
Depreciation is expensed as incurred, unless it relates to an asset or operation in the construction phase, in which case
it is capitalised.
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting
period.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is
greater than its estimated recoverable amount (note 2(h)).
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in
profit or loss.
(o) Exploration and evaluation expenditure
Exploration for and evaluation of mineral resources is the search for mineral resources after the entity has obtained
legal rights to explore in a specific area, as well as the determination of the technical feasibility and commercial viability
of extracting the mineral resource.
Exploration and evaluation expenditure is expensed to the profit or loss as incurred except in the following
circumstances in which case the expenditure may be capitalised:
• The existence of a commercially viable mineral deposit has been established and it is anticipated that future economic
benefits are more likely than not to be generated as a result of the expenditure; and
• The exploration and evaluation activity is within an area of interest which was acquired as an asset acquisition or in a
business combination and measured at fair value on acquisition.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward
costs in relation to that area of interest. An impairment exists when the carrying value of expenditure exceeds its
estimated recoverable amount. The area of interest is then written down to its recoverable amount and the impairment
losses are recognised in profit or loss.
(p) Mine properties
(i)
Mine properties in development
When technical feasibility and commercial viability of extracting a mineral resource have been demonstrated, then any
subsequent expenditure in that area of interest is classified as mine properties in development. These costs are not
amortised but the carrying value is assessed for impairment whenever facts and circumstances suggest that the
carrying amount of the asset may exceed its recoverable amount.
(ii)
Mine properties in production
Mine properties in production represent the accumulation of all acquisition, exploration, evaluation and development
expenditure incurred by or on behalf of the Group in relation to areas of interest in which mining of the mineral resource
has commenced. When further development expenditure, including waste development and stripping, is incurred in
respect of a mine property after the commencement of production, such expenditure is carried forward as part of the
cost of that mine property only when substantial future economic benefits are established, otherwise such expenditure is
classified as part of the cost of production.
Amortisation is provided on a units-of-production basis, with separate calculations being made for each mineral
resource. The units-of-production method results in an amortisation charge proportional to the depletion of the
economically recoverable mineral resources (comprising proven and probable reserves).
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward
costs in relation to that area of interest. An impairment exists when the carrying value of expenditure not yet amortised
exceeds its estimated recoverable amount. The asset is then written down to its recoverable amount and the
impairment losses are recognised in profit or loss.
Independence Group NL
39