At the date of authorisation of the financial report, the following Standards and Interpretations issued by the IASB/
IFRIC where an equivalent Australian Standard or Interpretation has not been made by the AASB, were in issue but
not yet effective:
New or revised requirement
Effective for annual reporting periods
beginning on or after
Consolidated Financial Statements, Joint Arrangements and Disclosure of
Interests in Other Entities: Transition Guidance (Amendments to IFRS 10,
IFRS 11 and IFRS 12)
30 June 2014
Reporting Basis and Conventions
The financial statements have been prepared on an accruals basis and is based on the historical costs modified by
the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of
accounting has been applied.
Critical Accounting Estimates and Judgements
The Directors evaluate estimates and judgements incorporated into the financial statements 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.
Critical Accounting Estimates
The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of
future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the
carrying amounts of certain assets and liabilities within the annual reporting period are:
a Impairment of production assets
In the absence of readily available market prices, the recoverable amounts of assets are determined using
estimations of the present value of future cashflows using asset-specific discount rates. For Oil & Gas
Properties, these estimates are based on assumptions concerning reserves, future production profiles and
estimated revenue and costs. For amortisation policy refer to note 1(f).
As at 30 June 2013, the carrying value of Oil & Gas assets is $2,271,792 (2012: nil).
b Recoverability of exploration and evaluation assets
The recoverability of exploration and evaluation assets is determined by the future discovery of economic oil and
gas reserves of sufficient quantity and quality in the relevant area of interest to offset costs to date.
As at 30 June 2013, the carrying value of exploration and evaluation assets is $56,941,014 (2012: $16,720,865).
c Performance options
The Company issued various classes of Performance Options during the year. The valuation of the various
classes of Performance Options was completed using the Black-Scholes option pricing model. This valuation
method takes into account the probability of the relevant performance option milestone being achieved. Where
it is considered that it is probable that a performance milestone will be achieved the Performance Options are
valued. If it is considered probable that a performance milestone will not be achieved the Performance Options
are assigned a value of nil.
a Principles of Consolidation
The Group comprise the accounts of Sun Resources and all of its controlled subsidiaries. Control exists, where
Sun Resources has the power to control the functional and operating policies so as to obtain benefits from its
activities. A list of subsidiaries is contained within Note 26 to the accounts.
All inter-company balances and transactions between subsidiaries in the Group, including any unrealised profits
or losses have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where
necessary to ensure consistencies with those policies applied by the parent entity.
Where controlled subsidiaries have entered or left the consolidated entity during the year, their operating results have
been included from the date control was obtained or until the date control ceased.
1 Summary of Significant Accounting Policies (continued)
SUN RESOURCES
ANNUAL REPORT 2013
51