Page 100 - Sundance Resources 2014 Annual Report

98 SUNDANCE RESOURCES LIMITED ANNUAL REPORT 2014
NOTE 24. SIGNIFICANT ACCOUNTING POLICIES (continued)
i) 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.
j) 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.
k) 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.
Capitalised mine development assets
Capitalised mine development expenditure is recognised at cost less accumulated amortisation and any impairment losses.
Where commercial production in an area of interest has commenced, the associated costs, together with any forecast
future capital expenditure necessary to develop proved and probable reserves, are amortised over the estimated economic
life of the mine on a units-of-production basis. Changes in factors such as estimates of proved and probable reserves that
affect unit-of production calculations are dealt with on a prospective basis.
The application of this policy 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 (please refer to the Directors Report – Material Business
Risks). 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
or Black Scholes, using the assumptions detailed in Note 18 Share Based Payments.
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014