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DAro EnErgy 2013 AnnuAl rEporT
177
PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 517
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2013 AND 2012
Expressed in thousands of
Ï
S Dollars, unless otherwise stated
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
m. Exploration and evaluation assets continued
Capitalised costs include costs directly related to exploration and evaluation activities in the relevant area of interest, and exclude physical assets, which are recorded in fixed assets. General and administrative costs are
allocated to an exploration or evaluation asset only to the extent that those costs can be related directly to operational activities in the relevant area of interest.
Capitalised exploration and evaluation expenditure is written off where the above conditions are no longer satisfied. Identifiable exploration and evaluation assets acquired in a business combination are recognised initially as assets
at fair value on acquisition and subsequently at cost less impairment charges. Exploration and evaluation expenditure incurred subsequent to the acquisition of an exploration asset in a business combination is accounted
for in accordance with the policy outlined above.
As the exploration and evaluation assets are not available for use, they are not depreciated. Exploration and evaluation assets are assessed for impairment if facts and circumstances indicate that impairment
may exist. Exploration and evaluation assets are also tested for impairment once commercial reserves are found, before the assets are transferred to “mining properties - mines under development”.
n. Mining properties
Development expenditure incurred by or on behalf of the Group is accumulated separately for each area of interest in which economically recoverable resources have been identified. Such expenditure comprises costs directly
attributable to the construction of a mine and the related infrastructure and excludes physical assets and land rights i.e. right to build, right to cultivate and right to use, which are recorded as fixed assets.
Once a development decision has been taken, the carrying amount of the exploration and evaluation assets in respect of the area of interest is transferred to “mines under development” within mining properties and
aggregated with the subsequent development expenditure.
“Mines under development” are reclassified as “mines in production” within mining properties at the end of the commissioning phase, when the mine is capable of operating in the manner intended by management.
No depreciation is recognised for “mines under development” until they are reclassified as “mines in production’’. When further development expenditure is incurred on a mining property after the commencement of production,
the expenditure is carried forward as part of the “mines in production” when it is probable that additional future economic benefits associated with the expenditure will flow to the Group. Otherwise such expenditure is classified
as a cost of production.
“Mines in production” including reclassified exploration, evaluation and any development expenditure, and payments to acquire mineral rights and leases are amortised using the units-of-production method, with separate
calculations being made for each area of interest. “Mines in production” will be depleted using a unit-of-production method on the basis of proved and probable reserves.
Identifiable mining properties acquired in a business combination are recognised as assets at their fair value. Development expenses incurred subsequent to the acquisition of the mining properties are accounted for in
accordance with the policy outlined above.
“Mines under development” and “mines in production” are tested for impairment in accordance with the policy described in Note 2l.
178
ÐÑÒ
IABlE, STrong, EFFICIEnT
PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 518
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2013 AND 2012
Expressed in thousands of
Ó
S Dollars, unless otherwise stated
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
o. Stripping costs
