NOTES TO THE FINANCIAL STATEMENTS
For the Financial Year Ended 31 December 2014
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.13 INTANGIBLE ASSETS (CONT’D)
(c)
DEFERRED MINE EXPLORATION AND EVALUATION EXPENDITURE
Deferredmine exploration and evaluation expenditure is stated at cost less accumulated amortisation and impairment
losses, if any.
Once the legal right to explore has been acquired, exploration and evaluation expenditure is charged to profit or
loss as incurred, unless the Group concludes that a future economic benefit is more likely than not to be realised.
Accumulated costs in relation to an abandoned area are written off in full to profit or loss in the year in which the
decision to abandon the area is made.
When production commences, the accumulated cost is amortised based on the unit-of-production method so as
to write off the expenditure in proportion to the depletion of the estimated economically recoverable ore reserves
and resources.
A review is carried out annually on the carrying amount of deferred mine exploration and evaluation expenditure
to determine whether there is any indication of impairment. Any impairment loss is recognised as an expense in
profit or loss.
(d)
DEFERRED MINE DEVELOPMENT EXPENDITURE
Deferred mine development expenditure is stated at cost less accumulated amortisation and impairment losses,
if any.
Mine development expenditure incurred in connection with development activities in respect of each area of
interest, which includes all activities conducted in the preparation of economically recoverable ore reserves and
resources until commercial production is accumulated in respect of each identifiable area of interest. These costs
are only deferred to the extent that they are expected to be recouped through the successful development of the
area. Waste removal (stripping) costs incurred during the production phase of a surface mine (production stripping
costs) are only capitalised to deferred mine development expenditure when all the following criteria are met:-
a.
It is probable that the future economic benefits (improved access to an ore body) associated with the stripping
activity will flow to the entity;
b.
The entity can identify the component of an ore body for which access has been improved; and
c.
The costs relating to the improved access to that component can be measured reliably.
Mine development expenditure which is considered to provide minimal benefit to future periods is recognised as
an expense in profit or loss.
When production in an area of interest commences, the accumulated cost for the relevant area of interest is
amortised based on the unit-of-production method so as to write off the expenditure in proportion to the depletion
of the estimated economically recoverable ore reserves and resources.
A review is carried out annually on the carrying amount of deferred development expenditure to determine whether
there is any indication of impairment. Any impairment loss is recognised as an expense in profit or loss.
68
THE STRAITS TRADING COMPANY LIMITED ANNUAL REPORT 2014
