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Whitehaven Coal Limited : Annual Report 2013
121 Whitehaven Coal Limited Annual Report 2013 Notes to the Financial Statements 30 June 2013 Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration and evaluation assets attributable to that area of interest are rst tested for impairment and then reclassi ed from intangible assets to mining property and development assets within property, plant and equipment. (ii) Water access rights The consolidated entity holds water access rights, which have been determined to have an inde nite life. The water access rights have been recognised at cost and are assessed annually for impairment. (iii) Rail access rights Rail access rights have a nite useful life and are carried at cost less, where applicable, any accumulated amortisation and accumulated impairment losses. The carrying values of rail access rights are reviewed to ensure they are not in excess of their recoverable amounts. Rail access rights are amortised over the life of the mine or access agreement using a unit sold basis. (iv) Other intangible assets Other intangible assets that are acquired by the consolidated entity, which have nite useful lives, are measured at cost less accumulated amortisation and accumulated impairment losses. Amortisation is charged to the statement of comprehensive income on a straight line basis over the estimated life of the mining property to which the intangible relates. (v) Subsequent expenditure Subsequent expenditure is capitalised only when it increases the future economic bene ts embodied in the speci c asset to which it relates. All other expenditure is recognised in the statement of comprehensive income as incurred. (vi) Goodwill Goodwill is recognised when the fair value of consideration paid for a business combination exceeds the fair value of the Group's share of the identi able net assets acquired. Goodwill is not amortised, however its carrying amount is assessed annually for impairment. l) Deferred stripping costs Expenditure incurred to remove overburden or waste material during the production phase of a mining operation is deferred to the extent it gives rise to future economic bene ts and charged to operating costs on a units of production basis using the estimated average stripping ratio for the area being mined. Changes in estimates of average stripping ratios are accounted for prospectively. For the purposes of assessing impairment, deferred stripping costs are grouped with other assets of the relevant cash generating unit. m) Leases The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires an assessment of whether the ful lment of the arrangement is dependent on the use of a speci c asset and the arrangement conveys a right to use the asset. Consolidated entity as lessee Finance leases, which transfer to the consolidated entity substantially all the risks and bene ts incidental to ownership of the leased item, are capitalised at the inception of the lease at an amount equal to the lower of the fair value of the leased asset and the present value of the minimum lease payments. Lease payments are apportioned between the nance charges and the reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised as an expense in the statement of comprehensive income. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is con rmed. Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term. Operating lease payments are recognised as an expense in the statement of comprehensive income on a straight-line basis over the lease term. Operating lease incentives are recognised as a liability when received and subsequently reduced by allocating lease payments between rental expense and a reduction of the liability.
Annual Report 2012