Page 53 - Sun Resources 2014 Annual Report

1 Summary of Significant Accounting Policies (continued)
m Interests in Joint Ventures
The economic entity’s share of the assets, liabilities, revenue and expenses of joint venture operations are included in
the appropriate items of the consolidated financial statements. Details of the economic entity’s expenses are shown
at Note 21 under interest in Joint Venture Operations.
n Provisions and Contingent Liabilities
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which
it is probable that an outflow of economic benefits will result and that outflow can be reliably measured. Contingent
liabilities are only disclosed when the probability for payment is not remote.
o Earnings per Share
i Basic earnings per share is determined by dividing net profit after income tax attributable to members of the
Company, excluding any costs of servicing the entity other than ordinary shares, by the weighted average
number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares
issued during the year.
ii Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take
into account the after income tax effect of interest and other financing costs associated with dilutive potential
ordinary shares and the weighted average number of shares assumed to have been issued for no consideration
in relation to dilutive potential ordinary shares.
p Segment Reporting
Segment revenues, expenses, assets and liabilities are those that are directly attributable to a segment and the
relevant portion that can be allocated to the segment on a reasonable basis using a “Management Approach”.
Segment assets include all assets used by a segment and consist primarily of operating cash, receivables, plant
and equipment and other assets, net of related provisions. Segment liabilities consist primarily of other creditors and
provisions.
q Share-based Payments
In order to apply the requirements of AASB2 “Share-based Payments” estimates were made to determine the “fair
value” of equity instruments issued to Directors and incorporated into a Black-Scholes Valuation Model for options.
The fair value at grant date is independently determined using the Black-Scholes option pricing model that takes
into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and the
expected volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of
the option.
The fair value of the options granted is recognised as an employee benefit expense with a corresponding increase in
equity over any applicable vesting period or where options are issued as consideration for an acquisition directly to
the asset acquired.
The fair value of performance options is only recognised where it is probable that the relevant milestone will be attained.
The fair value of all shares issued as consideration for an acquisition is valued at the market value of Sun Resources
NL shares at the date of allotment.
r Contributed Equity
Ordinary shares are classified as equity.
Incremental costs directly attributed to the issue of new shares or options are shown in equity as a deduction,
net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the
acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration.
s Employee Benefits
Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to
reporting date. Employee benefits that are expected to be settled within one year have been measured at the
amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits payable later
than one year have been measured at the present value of the estimated future cash outflows to be made for those
benefits.
The Group contributes to its employees’ superannuation plans in accordance with the requirements of the
Superannuation Guarantee (Administration) Act. Contributions by the Group represent a defined percentage of each
employee’s salary. Employee contributions are voluntary.
NOTES TO AND FORMING PART OF THE CONSOLIDATED
FINANCIAL STATEMENTS
SUN RESOURCES ANNUAL REPORT 2014  51