Page 98 - Sundance Resources 2014 Annual Report

96 SUNDANCE RESOURCES LIMITED ANNUAL REPORT 2014
NOTE 24. SIGNIFICANT ACCOUNTING POLICIES (continued)
b) Foreign currency (continued)
Exchange differences are recognised in profit or loss in the period in which they arise except for:
• exchange differences on foreign currency borrowings which relate to assets under construction for future productive
use, which are included in the cost of those assets where they are regarded as an adjustment to interest costs on
foreign currency borrowings; and
• exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither
planned or likely to occur, which form part of the net investment in a foreign operation, and which are recognised in the
foreign currency translation reserve and recognised in the profit or loss on disposal of the net investment.
On consolidation, assets and liabilities of the Group’s foreign operations are translated into Australian dollars at exchange
rates prevailing at the balance date. Income and expense items are translated at the average exchange rates for the
period, unless exchange rates fluctuate significantly during the period, in which case exchange rates at the dates of
the transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and
accumulated in equity (attributed to non-controlling interests as appropriate). Such exchange differences are recognised in
profit or loss in the period in which the foreign operation is disposed. Any exchange differences that have previously been
attributed to non-controlling interests are derecognised but they are not classified to profit or loss.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity on or after the date of the transition to
Australian Accounting Standards are treated as assets and liabilities of the foreign entity and translated at exchange rates
prevailing at the reporting date.
c) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:
i) where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of
acquisition of the asset or as part of an item of the expense; or
ii) for receivables and payables which are recognised inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of the receivables or
payables. Cash flows are included in the statement of cash flows on a gross basis. The GST component of cash flows
arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority, is classified
within operating cash flows.
d) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Interest revenue is recognised when it is
probable that the economic benefits will flow to the Group and the amount of revenue can be measured reliably. Interest
revenue is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable,
which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that
asset’s net carrying amount on initial recognition.
e) Share-based payments
Equity-settled share-based payments with employees and others providing similar services are measured at the fair value of
the equity instrument at the grant date. Fair value is measured by use of a Black Scholes or binomial model. The expected
life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability,
exercise restrictions, and behavioural considerations. Further details on how the fair value of equity-settled share-based
transactions have been determined can be found in Note 18.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis
over the vesting period, based on the Group’s estimate of the equity instruments that will eventually vest.
At each reporting date, the Group revises its estimate of the number of equity instruments expected to vest. The impact
of the revision of the original estimates, if any, is recognised in profit or loss over the remaining vesting period, with the
corresponding adjustment to the equity-settled employee benefits reserve.
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014