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Whitehaven Coal Limited : Annual Report 2013
126 Whitehaven Coal Limited Annual Report 2013 Notes to the Financial Statements 30 June 2013 w) Goods and services tax Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the statement of nancial position. Cash ows are included in the Statement of Cash Flows on a gross basis and the GST components of cash ows arising from investing and nancing activities which are recoverable from, or payable to, the ATO are classi ed as operating cash ows. 4. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS The preparation of the consolidated nancial statements requires management to make judgements, estimates and assumptions that a ect the reported amounts in the nancial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expense. Management bases its judgements and estimates on historical experience and on other various factors it believes to be reasonable under the circumstances, the result of which form the basis of the carrying values of assets and liabilities that are not readily apparent from other sources. Management has identi ed the following critical accounting policies for which signi cant judgements, estimates and assumptions are made. Actual results may di er from these estimates under di erent assumptions and conditions and may materially a ect nancial results or the nancial position reported in future periods. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods a ected. A number of the consolidated entity's accounting policies and disclosures require the determination of fair value, for both nancial and non- nancial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. Where applicable, further information about the assumptions made in determining fair values is disclosed in the notes speci c to that asset or liability. Mine rehabilitation The consolidated entity assesses its mine rehabilitation provisions at each reporting date. Signi cant estimates and assumptions are made in determining the provision for mine rehabilitation as there are numerous factors that will a ect the ultimate liability payable. These factors include estimates of the extent and costs of rehabilitation activities, technological changes, regulatory changes, cost increases, and changes in discount rates. Those uncertainties may result in future actual expenditure di ering from the amounts currently provided. The provisions at balance date represent management's best estimate of the present value of the future rehabilitation costs required. Changes to estimated future costs are recognised in the statement of nancial position by adjusting the rehabilitation asset and liability. If, for mature mines, the revised mine assets net of rehabilitation provisions exceeds the carrying value, that portion of the increase is charged directly to expense. For closed mines, changes to estimated costs are recognised immediately in the statement of comprehensive income. Exploration and evaluation expenditure The application of the consolidated entity's accounting policy for exploration and evaluation expenditure requires judgement in determining whether future economic bene ts are likely, which may be based on assumptions about future events or circumstances. Estimates and assumptions made may change if new information becomes available. If, after expenditure is capitalised, information becomes available suggesting that the recovery of expenditure is unlikely, the amount capitalised is written o in the statement of comprehensive income in the period when the new information becomes available. Carrying value of assets All mining assets are amortised over the shorter of the estimated remaining useful life or remaining mine life. For mobile and other equipment, the straight-line method is applied over the estimated useful life of the asset which does not exceed the estimated mine life based on proved and probable mineral reserves as the useful lives of these assets are considered to be limited to the life of the relevant mine. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
Annual Report 2012