NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2015
66
THE STRAITS TRADING COMPANY LIMITED
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.12 INTANGIBLE ASSETS (CONT’D)
(c)
Mine properties
Mine properties are stated at cost less accumulated amortisation and accumulated impairment losses, if any.
All expenditures incurred in connection with development activities in respect of each mine property, which
includes all activities conducted in the preparation of economically recoverable ore reserves and resources until
commercial production are accumulated in respect of each mine property. Exploration and evaluation expenditure
is also transferred to mine properties once the work completed to date for the area supports the future development
of the property and such development received appropriate approvals. 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 mine property 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.
Expenditure for a mine property which is considered to provide minimal benefit to future periods is recognised as
an expense in profit or loss.
When production for a mine property commences, the accumulated cost for the mine property 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. Changes in the estimated economically recoverable ore
reserves and resources are accounted for on a prospective basis from the beginning of the year in which the
changes arise.
A review is carried out annually on the carrying amount of a mine property to determine whether there is any
indication of impairment. Any impairment loss is recognised as an expense in profit or loss.
(d)
Mine restoration expenditure
Restoration expenditure incurred during the production phase of operations is recognised in profit or loss as part of
the cost of production of the mine property concerned.
Significant mine restoration expenditure to be incurred subsequent to the cessation of production of each mine
property is provided based on the present value of the estimated expenditure to be incurred.
(e)
Club memberships
Club memberships acquired separately are measured on initial recognition at cost. Following initial recognition,
club memberships are carried at cost less accumulated impairment losses, if any. Club memberships are amortised
on a straight-line basis over their finite useful lives. The amortisation period and amortisation method are reviewed
at each financial year-end.
