2012 Annual Report (2 April 2013) - Grange Resources

2012 ANNUAL REPORT
55
PAGE
Derivatives that do not qualify for hedge accounting
Certain derivative instruments do not qualify for hedge
accounting. Changes in the fair value of any derivative instruments
that do not qualify for hedge accounting are recognised
immediately in profit or loss.
Embedded derivatives
Derivatives embedded in other financial instruments or other host
contracts are treated as separate derivatives when their risks and
characteristics are not closely related to those of host contracts
and the host contracts are not measured at fair value with
changes in fair value recognised in profit or loss.
(w) Financial instruments issued by the company
Transaction costs on the issue of equity instruments
Transaction costs arising on the issue of equity instruments are
recognised directly in equity as a reduction of the proceeds of the
equity instruments to which the costs relate. Transaction costs are
the costs that are incurred directly in connection with the issue of
those equity instruments and which would not have been incurred
had those instruments not been issued.
Interest and dividends
Interest and dividends are classified as expenses or as
distributions of profit consistent with the balance sheet
classification of the related debt or equity instruments or
component parts of compound instruments.
(x) Non-current assets held for sale
Non-current assets (and disposal groups) classified as held for
sale are measured at the lower of carrying amount and fair value
less costs to sell.
Non-current assets and disposal groups are classified as held
for sale if their carrying amount will be recovered through a sale
transaction rather than through continuing use. This condition
is regarded as met only when the sale is highly probable and
the asset (or disposal group) is available for immediate sale in
its present condition. The sale of the asset (or disposal group)
is expected to be completed within one year from the date of
classification.
recognised by the date of the sale of the non-current asset is
recognised at the date of derecognition.
Non-current assets are not depreciated or amortised while
they are classified as held for sale. Interest and other expenses
attributable to the liabilities of a disposal group classified as held
for sale continue to be recognised.
Non-current assets classified as held for sale and the assets of a
disposal group classified as held for sale are presented separately
from the other assets in the balance sheet. The liabilities of a
disposal group are held for sale are presented separately from
other liabilities in the balance sheet.
(y) Ore reserves
The Company estimates its mineral resources and ore reserves
based on information compiled by Competent Persons as
defined in accordance with the Australasian Code for Reporting
of Exploration Results, Mineral Resources and Ore Reserves
of December 2004 (the JORC code). Reserves, and for certain
mineral resources, determined in this way are used in the
calculation of depreciation, amortisation and impairment charges,
the assessment of life of mine stripping ratios and for forecasting
the timing of the payment of close down and restoration costs.
In assessing the life of a mine for accounting purposes, mineral
resources are only taken into account where there is a high
degree of confidence of economic extraction.
(z) Trade and other payables
Trade payables and other payables are carried at amortised cost
and represent liabilities for goods and services provided to the
Group prior to the end of the financial period that are unpaid and
arise when the Group becomes obliged to make future payments
in respect of the purchase of these goods and services. The
amounts are unsecured and are usually paid within 30 days of
recognition.
An impairment loss is recognised for any initial or subsequent
write-down of the asset to fair value less costs to sell. A gain is
recognised for any subsequent increases in fair value less costs
to sell of an asset, but not in excess of any cumulative impairment
loss previously recognised. A gain or loss not previously