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Whitehaven Coal Limited : Annual Report 2011
WhitehavenCoalLimited–AnnualReport2011 59 noteS to the Financial StatementS 30 june 2011 3. summARy Of siGNifiCANT ACCOuNTiNG POLiCiEs (CONTiNuEd) c) segment reporting An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity), whose operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available Management will also consider other factors in determining operating segments such as the existence of a line manager and the level of segment information presented to the board of directors The group aggregates two or more operating segments when they have similar economic characteristics, and the segments are similar in each of the following respects: • nature of the products and services, • nature of the production processes, • type or class of customer for the products and services, • methods used to distribute the products or provide the services, and if applicable • nature of the regulatory environment d) Cash and cash equivalents Cash and cash equivalents comprise cash at bank and in hand and short term deposits For the purpose of the Statement of Cash Flows, bank overdrafts that are repayable on demand and form an integral part of the consolidated entity’s cash management are included as a component of cash and cash equivalents e) Trade and other receivables Trade receivables, which generally have 5-21 day terms, are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less an allowance for impairment Recoverability of trade receivables is reviewed on an ongoing basis Receivables due in more than one year are recognised initially at fair value, discounted back to net present value based on appropriate discount rates for the consolidated entity f) inventories Inventories are measured at the lower of cost and net realisable value Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses The cost of coal inventories is determined using a weighted average basis Cost includes direct material, overburden removal, mining, processing, labour, mine rehabilitation costs incurred in the extraction process and other fixed and variable overhead costs directly related to mining activities Inventory are classified as follows: • Run of mine: material extracted through the mining process • Finished goods: products that have passed through all stages of the production process • Consumables: goods or supplies to be either directly or indirectly consumed in the production process
Annual Report 2010
Annual Report 2012