Tax benefits acquired as part of a business combination, but not
satisfying the criteria for separate recognition at that date, are
recognised subsequently if new information about facts and
circumstances change. The adjustment is either treated as a
reduction in goodwill (as long as it does not exceed goodwill) if
it was incurred during the measurement period or recognised in
profit or loss.
Sales tax
Expenses and assets are recognised net of the amount of sales
tax, except:
- when the sales tax incurred on a purchase of assets or
services is not recoverable from the taxation authority, in which
case, the sales tax is recognised as part of the cost of
acquisition of the asset or as part of the expense item, as
applicable; and
- when receivables and payables are stated with the amount of sales tax included
The net amount of sales tax recoverable from, or payable to, the
taxation authority is included as part of receivables or payables
in the statement of financial position.
g) Property, plant and equipment
Property, plant and equipment are stated at cost, net of
accumulated depreciation and accumulated impairment losses, if any.
Such cost includes the cost of replacing part of the property,
plant and equipment and borrowing costs for long-term construction
projects if the recognition criteria are met. When significant
parts of property, plant and equipment are required to be replaced
at intervals, the Group recognises such parts as individual assets
with specific useful lives and depreciates them accordingly.
Likewise, when a major inspection is performed, its costs are
recognised in the carrying amount of the plant and equipment as a
replacement if the recognition criteria are satisfied. All other
repair and maintenance costs are recognised in profit or loss as
incurred. The present value of the expected cost for
decommissioning of an asset after its use is included in the cost
of the respective asset if the recognition criteria for a provision
are met.
Depreciation of an asset begins when it is available for use and
is computed on a straight-line basis over the estimated useful life
of the asset at the following annual rates:
Building - 1.67% to 20%
Renovation - 20%
Infrastructure - 4%
Office equipment, computers, furniture
and fittings - 10% to 20%
Plant and machinery - 20%
Motor vehicles - 20%
Depreciation of property, plant and equipment related to the
plantations are allocated proportionately based on the area of
mature and immature plantations.
Assets under construction included in property, plant and
equipment are stated at cost and not depreciated as these assets
are not yet available for use.
An item of property, plant and equipment and any significant
part initially recognised is derecognised upon disposal or when no
future economic benefits are expected from its use or disposal. Any
gain or loss arising on derecognition of the asset (calculated as
the difference between the net disposal proceeds and the carrying
amount of the asset) is included in the income statement when the
asset is derecognised.
The residual values, useful lives and methods of depreciation of
property, plant and equipment are reviewed at each financial year
end and adjusted prospectively, if appropriate.
h) Financial instruments - initial recognition and subsequent measurement
i) Financial assets (cont'd)
Initial recognition and measurement
Financial assets are classified, at initial recognition, as
financial assets at fair value through profit or loss, loans and
receivables, held-to-maturity investments, available-for-sale
financial assets, or as derivatives designated as hedging
instruments in an effective hedge, as appropriate. All financial
assets are recognised initially at fair value plus, in the case of
financial assets not recorded at fair value through profit or loss,
transaction costs that are attributable to the acquisition of the
financial asset.
Purchases or sales of financial assets that require delivery of
assets within a time frame established by regulation or convention
in the market place (regular way trades) are recognised on the
trade date, i.e., the date that the Group commits to purchase or
sell the asset.
The Group has only one class of financial assets, namely loans
and receivables.
Subsequent measurement
The subsequent measurement of loans and receivables is as
follows:
Loans and receivables
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. After initial measurement, such financial assets are
subsequently measured at amortised cost using the EIR method, less
impairment. Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortisation is included in other
operating income in the statement of profit or loss. The losses
arising from impairment are recognised in the statement of profit
or loss in finance costs for loans and in cost of sales or other
operating expenses for receivables.
Derecognition
A financial asset (or, where applicable, a part of a financial
asset or part of a group of similar financial assets) is primarily
derecognised (i.e., removed from the Group's consolidated statement
of financial position) when:
- The rights to receive cash flows from the asset have expired, or
- The Group has transferred its rights to receive cash flows
from the asset or has assumed an obligation to pay the received
cash flows in full without material delay to a third party under a
'pass-through' arrangement; and either (a) the Group has
transferred substantially all the risks and rewards of the asset,
or (b) the Group has neither transferred nor retained substantially
all the risks and rewards of the asset, but has transferred control
of the asset.
i) Financial assets
When the Group has transferred its rights to receive cash flows
from an asset or has entered into a pass-through arrangement, it
evaluates if and to what extent it has retained the risks and
rewards of ownership. When it has neither transferred nor retained
substantially all of the risks and rewards of the asset, nor
transferred control of the asset, the Group continues to recognise
the transferred asset to the extent of the Group's continuing
involvement. In that case, the Group also recognises an associated
liability. The transferred asset and the associated liability are
measured on a basis that reflects the rights and obligations that
the Group has retained.
ii) Impairment of financial assets
The Group assesses, at each reporting date, whether there is
objective evidence that a financial asset or a group of financial
assets is impaired. An impairment exists if one or more events that
has occurred since the initial recognition of the asset (an
incurred 'loss event'), has an impact on the estimated future cash
flows of the financial asset or the group of financial assets that
can be reliably estimated. Evidence of impairment may include
indications that the debtors or a group of debtors is experiencing
significant financial difficulty, default or delinquency in
interest or principal payments, the probability that they will
enter bankruptcy or other financial reorganisation and observable
data indicating that there is a measurable decrease in the
estimated future cash flows, such as changes in arrears or economic
conditions that correlate with defaults.
Financial assets carried at amortised cost
For financial assets carried at amortised cost, the Group first
assesses whether impairment exists individually for financial
assets that are individually significant, or collectively for
financial assets that are not individually significant. If the
Group determines that no objective evidence of impairment exists
for an individually assessed financial asset, whether significant
or not, it includes the asset in a group of financial assets with
similar credit risk characteristics and collectively assesses them
for impairment. Assets that are individually assessed for
impairment and for which an impairment loss is, or continues to be,
recognised are not included in a collective assessment of
impairment.
The amount of any impairment loss identified is measured as the
difference between the asset's carrying amount and the present
value of estimated future cash flows (excluding future expected
credit losses that have not yet been incurred). The present value
of the estimated future cash flows is discounted at the financial
asset's original effective interest rate.
ii) Impairment of financial assets (cont'd)
The carrying amount of the asset is reduced through the use of
an allowance account and the loss is recognised in statement of
profit or loss. Interest income (recorded as finance income in the
statement of profit or loss) continues to be accrued on the reduced
carrying amount and is accrued using the rate of interest used to
discount the future cash flows for the purpose of measuring the
impairment loss. Loans together with the associated allowance are
written off when there is no realistic prospect of future recovery
and all collateral has been realised or has been transferred to the
Group. If, in a subsequent year, the amount of the estimated
impairment loss increases or decreases because of an event
occurring after the impairment was recognised, the previously
recognised impairment loss is increased or reduced by adjusting the
allowance account. If a write-off is later recovered, the recovery
is credited to finance costs in the statement of profit or
loss.
iii) Financial liabilities
Initial recognition and measurement
Panther Metals (LSE:PALM)
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