Page 52 - Sun Resources 2014 Annual Report

1 Summary of Significant Accounting Policies (continued)
i Financial Instruments
i Loans Receivable
Loans receivable from subsidiaries are non-derivative financial assets with fixed or determinable payments. They
are included in current assets, except for those maturities greater than 12 months, which are classified as non-
current assets. The non-current loans are included in note 23 under parent entity information.
ii Available for Sale Financial Assets
Investments are classified as either available-for-sale or held for trading, and are initially recognised at fair value
plus in the case of investments not held for trading, with any directly attributable transaction costs.
After initial recognition, investments are measured at fair value. Changes in the fair value of available-for-
sale investments are recognised as a separate component of equity until the investment is sold or until the
investment is determined to be impaired, at which time the cumulative change in the fair value previously
reported in equity is included in earnings. Changes in the fair value of held for trading investments are
recognised in the Statement of Comprehensive Income.
For investments that are actively traded in organised financial markets, fair value is determined by reference to
stock exchange quoted market bid prices at the close of business on the 30 June 2014.
iii Loans and other Payables
Loans and other payables are non-derivative financial liabilities with fixed or determinable payments. They are
included in non-current liabilities as they have maturities greater than 12 months after the reporting date.
j Cash and Cash Equivalents
Cash and cash equivalents include cash on-hand, deposits held at call with banks, other short-term highly liquid
investments with original maturities of three months of less, and bank overdrafts. Bank overdrafts are shown within
short-term borrowings in current liabilities on the Statement of Financial Position.
k Plant and Equipment
Each class of plant and equipment is carried at cost less, where applicable, any accumulated depreciation and
impairment losses.
Plant and equipment
Plant and equipment are measured on the cost basis.
The carrying amount of plant and equipment is reviewed annually by Directors to ensure it is not in excess of the
recoverable amount from these assets.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probably that future economic benefits associated with the item will flow to the Group and the cost of
the item can be measured reliably. All other repairs and maintenance are charged to the Statement of Profit or Loss
and other Comprehensive Income during the financial period in which they are incurred.
Depreciation
The depreciable amount of all fixed assets is depreciated on a diminishing value basis over their useful lives to the
Group commencing from the time the asset is held ready for use.
The depreciation rates used for each class of depreciable assets are:
Depreciation Rate
Plant and equipment 25% - 40%
Furniture and fittings 20%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the year end.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and
losses are included in the Statement of Profit or Loss and other Comprehensive Income.
l Impairment of Assets
At each reporting date, the Group reviews the carrying values of its tangible and intangible assets finite life to
determine whether there is any indication that those assets have been impaired. If such an indication exists, the
recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is
compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is
expensed to the Statement of Profit or Loss and other Comprehensive Income.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs.
NOTES TO AND FORMING PART OF THE CONSOLIDATED
FINANCIAL STATEMENTS
50 SUN RESOURCES ANNUAL REPORT 2014