Annual Report 2011 - QuamIR

Notes to the Consolidated Financial StatementsFor the year ended 31 March 20113. Significant Accounting Policies (continued)Impairment of exploration and evaluation assetsThe carrying amount of the exploration and evaluation assets is reviewed annually and adjusted forimpairment in accordance with HKAS 36 “Impairment of Assets” whenever one of the following eventsor changes in circumstances indicate that the carrying amount may not be recoverable (the list is notexhaustive):– the period for which the Group has the right to explore in the specific area has expired duringthe period or will expire in the near future, and is not expected to be renewed;– substantive expenditure on further exploration for and evaluation of mineral resources in thespecific area is neither budgeted nor planned;– exploration for and evaluation of mineral resources in the specific area have not led to thediscovery of commercially viable quantities of mineral resources and the Group has decided todiscontinue such activities in the specific area; or– sufficient data exist to indicate that, although a development in the specific area is likely toproceed, the carrying amount of the exploration and evaluation asset is unlikely to be recoveredin full from successful development or by sale.An impairment loss is recognized in profit or loss whenever the carrying amount of an asset exceedsits recoverable amount.Impairment of tangible and intangible assets other than goodwill and explorationand evaluation assetsAt the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangibleassets to determine whether there is any indication that those assets have suffered an impairment loss.If any such indication exists, the recoverable amount of the asset is estimated in order to determine theextent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of anindividual asset, the Group estimates the recoverable amount of the cash-generating unit to which theasset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assetsare also allocated to individual cash-generating units, or otherwise they are allocated to the smallest groupof cash-generating units for which a reasonable and consistent allocation basis can be identified.Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested forimpairment at least annually, and whenever there is an indication that the asset may be impaired.Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value inuse, the estimated future cash flows are discounted to their present value using a pre-tax discount ratethat reflects current market assessments of the time value of money and the risks specific to the assetfor which the estimates of future cash flows have not been adjusted.Annual Report 201161