79
CONSOLIDATED FINANCIAL STATEMENTS
DRIVING GROWTH FROM WITHIN
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013
(All amounts in US$‘000’s unless otherwise stated)
Objective evidence of impairment could include the following:
• significant financial difficulty of the issuer or counterparty;
• default or delinquency in interest or principal payments; or
• it has become probable that the borrower will enter bankruptcy or financial reorganization.
For financial assets carried at amortized cost, the amount of the impairment is the difference between the asset’s carrying
amount and the present value of the estimated future cash flows, discounted at the financial asset’s original effective
interest rate.
The carrying amount of all financial assets at amortized cost, excluding trade receivables, is directly reduced by the
impairment loss. The carrying amount of trade receivables is reduced through the use of an allowance account. When a
trade receivable is considered uncollectable, it is written off against the allowance account. Subsequent recoveries of
amounts previously written off are credited against the allowance account. Changes in the carrying amount of the
allowance account are recognized in income or loss.
With the exception of AFS equity instruments, if in a subsequent period, the amount of the impairment loss decreases
and the decrease relates to an event occurring after the impairment was recognized, the previously recognized impairment
loss is reversed through income or loss. On the date of impairment reversal, the carrying amount of the financial asset
cannot exceed its amortized cost had an impairment not been recognized.
f) Derecognition of Financial Assets
A financial asset is derecognized when:
• the contractual right of the asset’s cash flows expire; or
• if the Company transfers the financial asset and substantially all risks and reward of ownership to another entity.
ii.
Financial Liabilities
Derivatives are categorized as held-for-trading. Derivatives are initially recognized at fair value on the date a derivative
contract is entered into and are subsequently remeasured at their fair value. Fair value of the Company’s recognized
commodity-based derivatives are based on the forward prices of the associated market index. Gains or losses are
recorded in the consolidated statement of income.
Long term debt and other financial liabilities are recognized initially at the fair value, net of transaction costs incurred,
and are subsequently stated at amortized cost. Any difference between the amounts originally received (net of transaction
costs) and the redemption value is recognized in the consolidated statement of income over the period to maturity using
the effective interest method.
iii. Classification and Subsequent Measurements
The Company has designated each of its significant categories of financial instruments as follows:
Financial Instrument
Classification
Measurement
Cash and Cash Equivalents
FVTPL
Fair value
Short Term Investments
FVTPL
Fair value
Derivative Assets
FVTPL
Fair value
Trade Receivable from Concentrate Sales
FVTPL
Fair value
Other Accounts Receivables
Loans and receivables
Amortized cost
Due from Related Parties
Loans and receivables
Amortized cost
Long Term Receivables
Loans and receivables
Amortized cost
Trade and Other Payables
Other liabilities
Amortized cost
Due to Related Parties
Other liabilities
Amortized cost
Derivative Liabilities
FVTPL
Fair value
Income Tax Payable
Other liabilities
Amortized cost
Lease and Long Term Liabilities
Other liabilities
Amortized cost
iv. Effective Interest Method
The effective interest method calculates the amortized cost of a financial instrument and allocates interest income or
expense over the corresponding period. The effective interest rate is the rate that discounts estimated future cash
receipts or payments over the expected life of the financial instrument, or where appropriate, a shorter period, to the net
carrying amount on initial recognition. Income or expense is recognized on an effective interest basis for instruments
other than those financial instruments classified as FVTPL.
2. Basis of Consolidation and Summary of Significant Accounting Policies (Continued)
o) Financial Instruments (Continued)
e) Impairment of Financial Assets (Continued)
