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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
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Notes to the consolidated financial statements
30 June 2015
2 Summary of significant accounting policies (continued)
(q) Deferred stripping
Stripping activity costs incurred in the development phase of a mine are capitalised as part of the cost of constructing
the mine and subsequently amortised over the life of the mine on a units-of-production basis.
Stripping activity incurred during the production phase of a mine is assessed as to whether the benefit accruing from
that activity is to provide access to ore that can be used to produce ore inventory, or whether it in addition provides
improved access to ore that will be mined in future periods.
To the extent that the benefit from the stripping activity is realised in the form of inventory produced, the Group accounts
for those stripping activity costs in accordance with AASB102
Inventories
. A stripping activity asset is brought to account
if it is probable that future economic benefits (improved access to the ore body) will flow to the Group, the component of
the ore body for which access has been improved can be identified and costs relating to the stripping activity can be
measured reliably.
The amount of stripping activity costs that are capitalised is determined based on a comparison of the stripping ratio in
the relevant period with the life of mine stripping ratio. To the extent that there is a period of sustained stripping that
exceeds the average life of mine stripping ratio, mine waste stripping costs are capitalised to the stripping activity asset.
Such capitalised costs are amortised over the life of that mine on a units-of-production basis. The life of mine ratio is
based on economically recoverable reserves of the mine. Changes to the life of mine are accounted for prospectively.
Deferred stripping costs are included in Mine Properties in the balance sheet. These form part of the total investment in
the relevant cash generating units, which are reviewed for impairment if events or changes of circumstances indicate
that the carrying value may not be recoverable.
(r) Rehabilitation, restoration and environmental costs
Long-term environmental obligations are based on the Group’s environmental management plans, in compliance with
current environmental and regulatory requirements.
Full provision is made based on the net present value of the estimated cost of restoring the environmental disturbance
that has occurred up to the reporting date. To the extent that future economic benefits are expected to arise, these costs
are capitalised and amortised over the remaining lives of the mines.
Annual increases in the provision relating to the change in the net present value of the provision are recognised as
finance costs. The estimated costs of rehabilitation are reviewed annually and adjusted as appropriate for changes in
legislation, technology or other circumstances. Cost estimates are not reduced by the potential proceeds from the sale
of assets or from plant clean-up at closure.
(s) Intangible assets
(i)
Goodwill
Goodwill is measured as described in note 2(e). Goodwill on acquisitions of subsidiaries is included in intangible assets.
Goodwill is not amortised but it is tested for impairment annually, or more frequently if events or changes in
circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Gains and
losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those
cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in
which the goodwill arose.
(ii)
Other
Other intangible assets relate to a database for research purposes, which is carried at fair value at the date of
acquisition less accumulated amortisation. Amortisation is calculated based on the time it will take to complete the
research on the database which is currently four years.
(t) Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which
are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables
are presented as current liabilities unless payment is not due within 12 months from the reporting date. They are
recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.
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