Page 73 - Bauxite Resources Annual Report 2014

Annual Report 2014 Bauxite Resources | 71
NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements cont.
71 Bauxite Resources Annual Report 2014
ii. Exploration
The Group has continued to advance its business case of defining an economic bauxite resource necessary to support a
direct shipping ore (DSO) operation. The Group is also exploring for refinery grade bauxite on its tenements in the south-
west of Western Australia.
iii. Bankable feasibility and other studies
During the 2011 financial year, the Company entered into an agreement with Yankuang for an alumina refinery joint
venture.
iv. Administration & Other
The administration area supports the above mining, exploration and bankable feasibility segments.
Basis of accounting for purposes of reporting by operating segments
a. Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of Directors, being the chief decision maker with respect to
operating segments, are determined in accordance with accounting policies that are consistent to those adopted in the
annual financial statements of the Group.
b. Inter-segment transactions
An internally determined transfer price is set for all inter-segment sales. This price is reset quarterly and is based on what
would be realised in the event the sale was made to an external party at arm’s length. All such transactions are eliminated
on consolidation of the Group’s financial statements.
Inter-segment loans payable and receivable are initially recognised at the consideration received/to be received net of
transaction costs. If inter-segment loans receivable and payable are not on commercial terms, these are not adjusted to
fair value based on market interest rates. This policy represents a departure from that applied to the statutory financial
statements.
c. Segment assets
Where an asset is used across multiple segments, the asset is allocated to that segment that receives majority economic
value from that asset. In the majority of instances, segment assets are clearly identifiable on the basis of their nature and
physical location.
d. Segment liabilities
Liabilities are allocated to segments where there is a direct nexus between the incurrence of the liability and the operations
of the segment. Borrowings and tax liabilities are generally considered to relate to the Group as a whole and are not
allocated. Segment liabilities include trade and other payables and certain direct borrowings.
e. Unallocated items
The following items of revenue, expenses, assets and liabilities are not allocated to operating segments as they are not
considered part of the core operations of any segment:
— Derivatives
— Net gains on disposal of available-for-sale investments
— Income tax expense
— Deferred tax assets and liabilities
— Current tax liabilities
— Other financial liabilities
— Intangible assets
— Discontinuing operations
— Retirement benefit obligations