Page 49 - Sun Resources 2014 Annual Report

1 Summary of Significant Accounting Policies (continued)
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 are 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 2014, the carrying value of Oil & Gas assets is $742,690 (2013: $2,271,792).
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 2014, the carrying value of exploration and evaluation assets is $47,579,653 (2013: $56,941,014).
Going Concern
The Company has recorded a net loss after tax of ($27,848,265) [2013: ($10,247,996)] for the year ended 30 June
2014 and has net assets of $49,076,655 [2013: $57,149,829] as at reporting date.
Notwithstanding the above, the Directors of the Company have prepared the annual financial statements on the
going concern assumption. To enable the Company to continue its activities, the Company may seek to raise funds
in the future. Over the course of the next 12 months, the Directors consider that there are reasonable grounds to
believe that the Company will be able to pay its debts as and when they become due and payable and that the
going concern basis of preparation remains appropriate when preparing the annual financial report. However, the
Company may be required to realise assets and extinguish liabilities other than in the normal course of business and
at amounts different to those stated in the financial report of the Company at 30 June 2014.
a Principles of Consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Sun Resources NL
(‘company’ or ‘parent entity’) as at 30 June 2014 and the results of all subsidiaries for the year then ended. The
Company and its subsidiaries together are referred to in these financial statements as the ‘consolidated entity’.
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an
entity when the consolidated entity is exposed to, or has the right to, variable returns from its involvement with the
entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are
fully consolidated from the date on which control is transferred to the consolidated entity. They are de-consolidated
from the date that control ceases.
SUN RESOURCES ANNUAL REPORT 2014  47
NOTES TO AND FORMING PART OF THE CONSOLIDATED
FINANCIAL STATEMENTS