20974 29Metals AR23 WEB V1 - Flipbook - Page 168
164
29Metals 2023 Annual Report
Consolidated Financial Statements continued
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29Metals Appendix 4E and Annual Financial Report for 29Metals Limited and its Controlled Entities for the year ended 31 December 2023
Consolidated Financial Statements
Note 19: Property, plant & equipment (continued)
Recognition and measurement
(i) Cost
roperty, plant and e uipment is stated at historical cost less accumulated depreciation and impairment losses, if any. istorical cost includes
expenditure that is directly attributable to the ac uisition of the items, and costs incurred in bringing the asset to the location and condition necessary for
it to be capable of operating in the manner intended by the Company. The cost of property, plant and e uipment includes the estimated cost of
rehabilitation, restoration and dismantling.
(ii) Depreciation and amortisation
The major categories of property, plant and e uipment are depreciated over the estimated useful lives of the relevant assets on a unit of production or
reducing balance basis, as specified below. The useful lives below are subject to the lesser of the asset categories’ useful life and the life of the mine:
&ƌĞĞŚŽůĚůĂŶĚ
ot depreciated
ƵŝůĚŝŶŐƐ
educing balance
WůĂŶƚĂŶĚŵĂĐŚŝŶĞƌLJ;ŵŝŶŝŶŐĂŶĚƉƌŽĐĞƐƐŝŶŐͿ
ŽŶƐƚƌƵĐƚŝŽŶŝŶƉƌŽŐƌĞƐƐ
and straight line
Unit of production (tonnes mined and milled or straight line reducing balance over the useful life of the asset, as
applicable
ot depreciated
epreciation and amortisation commences when an asset is available for use.
The unit of production method is applied based on estimates of WƌŽǀĞŶ and WƌŽďĂďůĞ re eserves and a portion of ineral esources considered
probable for extraction. re eserves and ineral esources estimates are reviewed annually. The depreciation and amortisation expense calculation
reflect the re eserves and ineral esources estimates as at the reporting date. ( efer to ote .
ajor spare parts are carried as property, plant and e uipment when the Group expects to use them during more than one year, or when they can be
used only in connection with an item of property, plant and e uipment. The carrying amount of any part replaced is subse uently derecognised. ll other
repairs and maintenance are expensed in the Consolidated tatement of Comprehensive Income during the accounting year in which they are incurred.
(iii) Disposal of property, plant and equipment
n disposal of an item of property, plant and e uipment, the difference between the disposal proceeds and the carrying amount of the asset is
recognised in the Consolidated tatement of Comprehensive Income.
(iv) Impairment
The carrying amounts of the Group’s non financial assets are reviewed at each balance date to determine whether there is any indication of impairment.
If any such indication exists, the asset’s recoverable amount is estimated.
or impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use, and which are
largely independent of the cash inflows of other assets or groups of assets – the cash generating unit (‘'h’ . The recoverable amount of an asset or CGU
is the greater of its value in use and its fair value less costs of disposal (‘&s>’ . In assessing
C , the estimated future cash flows are discounted to
their present value using a pre tax discount rate that reflects current mar et assessments of the time value of money and the ris s specific to the asset.
n impairment loss is recognised whenever the carrying amount of an asset or its CGU exceeds its recoverable amount. Impairment losses are allocated
such that the carrying value of individual assets within the Group’s CGUs are not reduced below their recoverable amount.
Significant accounting estimates and assumptions
Impairment of non-financial assets
Impairment assessments re uire the use of estimates and assumptions such as long term commodity prices (considering current and historical prices,
price trends and related factors , discount rates, operating costs, future capital re uirements, closure and rehabilitation costs, exploration potential,
reserves and operating performance (which includes production and sales volumes . These estimates and assumptions are subject to ris and uncertainty.
Therefore, there is a possibility that changes in circumstances will impact these projections, which may impact the recoverable amount of assets and or
CGUs. In such circumstances, some or all of the carrying amount of the assets CGUs may be further impaired or the impairment charge reduced with the
impact recognised in the Consolidated tatement of Comprehensive Income.
efer ote for indicators of impairment identified and impairment of non current assets during the year ended
indicators of impairment identified .
89
ecember
(
: no
