Page 47 - Bauxite Resources Annual Report 2013

Notes to the Financial Statements cont.
(iv) Available-for-sale financial assets
Available-for-sale financial assets, comprising principally marketable equity securities, are non-derivatives that are either
designated in this category or not classified in any of the other categories. They are included in non-current assets unless
management intends to dispose of the investment within 12 months of the balance sheet date. Investments are designated
available-for-sale if they do not have fixed maturities and fixed or determinable payments and management intends to hold them
for the medium to long term.
Recognition and de-recognition
Regular purchases and sales of financial assets are recognised on trade-date – the date on which the Group commits to purchase
or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair
value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value and
transaction costs are expensed to the income statement. Financial assets are derecognised when the rights to receive cash flows
from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and
rewards of ownership.
When securities classified as available-for-sale are sold, the accumulated fair value adjustments recognised in equity are included
in the income statement as gains and losses from investment securities.
Subsequent measurement
Loans and receivables and held-to-maturity investments are carried at amortised cost using the effective interest method.
Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value.
Gains or losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are
presented in the income statement within other income or other expenses in the period in which they arise. Dividend income
from financial assets at fair value through profit or loss is recognised in the income statement as part of revenue from continuing
operations when the Group’s right to receive payments is established.
Changes in the fair value of monetary securities denominated in a foreign currency and classified as available-for-sale are
analysed between translation differences resulting from changes in amortised cost of the security and other changes in the
carrying amount of the security. The translation differences related to changes in the amortised cost are recognised in profit
or loss, and other changes in carrying amount are recognised in equity. Changes in the fair value of other monetary and non-
monetary securities classified as available-for-sale are recognised in equity.
Details on how the fair value of financial investments is determined are disclosed in note 2.
Impairment
The Group assesses at each balance date whether there is objective evidence that a financial asset or group of financial assets
is impaired. In the case of equity securities classified as available-for-sale, a significant or prolonged decline in the fair value of a
security below its cost is considered as an indicator that the securities are impaired. If any such evidence exists for available-for-
sale financial assets, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less
any impairment loss on that financial asset previously recognised in profit or loss – is removed from equity and recognised in the
income statement. Impairment losses recognised in the income statement on equity instruments classified as available-for-sale are
not reversed through the income statement.
(l) Plant and equipment
All plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly
attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured
reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income
statement during the reporting period in which they are incurred.
Depreciation of plant and equipment is calculated using the reducing balance method to allocate their cost, net of their residual
values, over their estimated useful lives. The rates vary between 13.33% and 40% per annum.
Annual Report 2013 Bauxite Resources 45