Annual Report 2011 - QuamIR

Notes to the Consolidated Financial StatementsFor the year ended 31 March 20113. Significant Accounting Policies (continued)Intangible assetsIntangible assets acquired separatelyIntangible assets with finite useful lives that are acquired separately are carried at cost less accumulatedamortization and accumulated impairment losses. Amortization is recognized on a straight-line basisover their estimated useful lives. The estimated useful life and amortization method are reviewed atthe end of each reporting period, with the effect of any changes in estimate being accounted for on aprospective basis. Intangible assets with indefinite useful lives that are acquired separately are carriedat cost less accumulated impairment losses.Intangible assets acquired in a business combinationIntangible assets that are acquired in a business combination are recognized separately from goodwill andare initially recognized at their fair value at the acquisition date (which is regarded as their cost).Subsequent to initial recognition, intangible assets acquired in a business combination are reported atcost less accumulated amortization and accumulated impairment losses, on the same basis as intangibleassets that are acquired separately.Derecognition of intangible assetsAn intangible asset is derecognized on disposal, or when no future economic benefits are expected fromuse or disposal. Gains and losses arising from derecognition of an intangible asset, measured as thedifference between the net disposal proceeds and the carrying amount of the asset, are recognized inprofit or loss when the asset is derecognized.Mining rightsMining rights are initially measured at cost. The carrying amount of exploration and evaluation assets isreclassified to mining rights when the technical feasibility and commercial viability of extracting mineralresources are demonstrable. Mining rights with finite useful lives are carried at costs less accumulatedamortization and any identified impairment loss. The mining rights with finite useful lives are amortizedon a unit of production basis over the estimated economic reserve of the mine.Exploration and evaluation assetsExploration and evaluation assets are recognized at cost on initial recognition. Subsequent to initialrecognition, exploration and evaluation assets are stated at cost less any accumulated impairment losses.Exploration and evaluation assets include the cost of exploration rights and the expenditures incurred inthe search for mineral resources as well as the determination of the technical feasibility and commercialviability of extracting those resources. When the technical feasibility and commercial viability of extractingmineral resources become demonstrable, previously recognized exploration and evaluation assets arereclassified as either intangible assets or property, plant and equipment. These assets are assessed forimpairment before reclassification, and any impairment loss is recognized in profit or loss.Sino Prosper State Gold Resources Holdings Limited60