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Whitehaven Coal Limited : Annual Report 2013
124 Whitehaven Coal Limited Annual Report 2013 Notes to the Financial Statements 30 June 2013 s) Contributed equity Ordinary shares are classi ed as equity. Incremental costs directly attributable to issue of ordinary shares and share options are recognised as a deduction from equity, net of any related income tax bene t. t) Revenue and other income recognition (i) Sale of coal Revenue from the sale of coal is recognised in the statement of comprehensive income when the signi cant risks and rewards of ownership have been transferred to the buyer. Transfer of risk and rewards are considered to have passed to the buyer under the terms of the individual contracts. Revenue from the sale of Narrabri development coal is being o set against development costs capitalised on the statement of nancial position until longwall production reaches operational levels. (ii) Rental income Rental income is recognised in the statement of comprehensive income on a straight-line basis over the term of the lease. Revenue received before it is earned is recorded as unearned lease income in the statement of nancial position at its net present value, determined by discounting the expected notional future cash ows at a pre-tax rate that re ects current market assessments of the time value of money. (iii) Hire of plant The consolidated entity hires plant under operating leases to its subsidiaries and joint ventures. Revenue from the plant hire is recognised in the statement of comprehensive income as earned. u) Finance income and expense Finance income comprises interest income on funds invested, dividend income, changes in the fair value of nancial assets at fair value through pro t or loss and foreign currency gains. Interest income is recognised as it accrues, using the e ective interest method. Dividend income is recognised on the date that the consolidated entity's right to receive payment is established. Finance expenses comprise interest expense on borrowings, unwinding of the discount on provisions, foreign currency losses, changes in the fair value of nancial assets at fair value through pro t or loss, impairment losses recognised on nancial assets, and losses on hedging instruments that are recognised in pro t or loss. All borrowing costs are recognised in pro t or loss using the e ective interest method, except where capitalised as part of a qualifying asset. Foreign currency gains and losses are reported on a net basis. v) Income tax Income tax on the pro t or loss for the year comprises current and deferred tax. Income tax expense is recognised in the statement of comprehensive income except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered or paid to the taxation authorities based on the taxable income for the year, using tax rates enacted or substantively enacted at the balance date. Deferred income tax is provided on all temporary di erences at the balance date between the tax basis of assets and liabilities and their carrying amounts for nancial reporting purposes, other than for the following temporary di erences: • when the deferred income tax asset/liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and that a ects neither accounting nor taxable pro t, • when the taxable temporary di erence is associated with investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future. Deferred income tax assets are recognised only to the extent that it is probable that future taxable pro ts will be available against which the deductible temporary di erences can be utilised. The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that su cient taxable pro t will be available to allow all or part of the deferred income tax asset to be utilised. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
Annual Report 2012