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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
Annual Report 2015 113
Notes to the consolidated financial statements
30 June 2015
3 Voluntary change in accounting policy
(a) Exploration and evaluation accounting policy
The financial report has been prepared on the basis of a retrospective application of a voluntary change in accounting
policy relating to exploration and evaluation expenditure.
The new exploration and evaluation expenditure accounting policy is to capitalise exploration and evaluation
expenditure only if it is anticipated that future economic benefits are more likely than not to be generated as a result of
the expenditure. All other exploration and evaluation expenditure will be expensed against the profit and loss as
incurred. Acquisition costs and expenditure incurred after a decision to proceed to development will continue to be
capitalised as an asset.
The previous accounting policy was to capitalise exploration and evaluation expenditure incurred and carry forward as
an asset when rights to tenure of the area of interest were current and costs were expected to be recouped through the
successful development of the area of interest (or alternatively by its sale), or where activities in the area had not yet
reached a stage which permitted a reasonable assessment of the existence or otherwise of economically recoverable
reserves and active operations were continuing.
Management judges that the change in policy will result in more relevant and reliable information in the financial report.
Recognition criteria of exploration and evaluation assets are inherently uncertain and expensing as incurred results in a
more transparent balance sheet and profit or loss. Furthermore, the change in policy aids in accountability of line
management’s expenditures and the newly adopted policy is consistent with those of many mining companies.
(b) Impact on financial statements
(i)
Impact on prior years
As a result of the change in the accounting policy for exploration and evaluation expenditure, prior year financial
statements had to be restated. The amounts disclosed for the 2014 reporting period and in the balance sheets as at 1
July 2013 and 30 June 2014 are after the change in accounting policy for exploration and evaluation expenditure.
Independence Group NL
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