81
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)
i.
Critical Judgments
• The analysis of the functional currency for each entity of the Company. In concluding that the United States dollar
functional currency for its Peruvian and Mexican entities and the Canadian and Barbados entities have a Canadian
dollar functional currency, management considered the currency that mainly influences the cost of providing goods
and services in each jurisdiction in which the Company operates. As no single currency was clearly dominant the
Company also considered secondary indicators including the currency in which funds from financing activities are
denominated and the currency in which funds are retained.
• In concluding when commercial production has been achieved, the Company considered the following factors:
• all major capital expenditures to bring the mine to the condition necessary for it to be capable of operating in
the manner intended by management have been completed;
• the mine or mill is operating as per design capacity and metallurgical recoveries were achieved; and,
• the ability to sustain ongoing production of ore at a steady or increasing level.
• The identification of reportable segments, basis for measurement and disclosure of the segmented information.
• The determination of estimated useful lives and residual values of tangible and long lived assets and the
measurement of depreciation expense.
• The identification of impairment indicators, cash generating units and determination of carrying value or fair value
less cost to sell and the write down of tangible and long lived assets.
• Measurement of financial instruments involve significant judgments related to interpretation of the terms of the
instrument, identification, classification, impairment and the overall measurement to approximate fair values.
ii.
Estimates
• the recoverability of amounts receivable which are included in the consolidated statements of financial position;
• the estimation of assay grades of metal concentrates sold in the determination of the carrying value of accounts
receivable which are included in the consolidated statements of financial position and included as sales in the
consolidated statements of income;
• the determination of net realizable value of inventories on the consolidated statements of financial position;
• the estimated useful lives of property, plant and equipment which are included in the consolidated statements of
financial position and the related depreciation included in the consolidated statements of income;
• the determination of mineral reserves and the portion of mineral resources expected to be extracted economically,
carrying amount of mineral properties, and depletion of mineral properties included in the consolidated statements
of financial position and the related depletion included in the consolidated statements of income;
• the review of tangible and intangible assets carrying value, the determination of whether these assets are impaired
and the measurement of impairment charges or reversals which are included in the consolidated statements of
income;
• the assessment of indications of impairment of each mineral property and related determination of the net
realizable value and write-down of those properties where applicable;
• the determination of the fair value of financial instruments and derivatives included in the consolidated statements
of financial position;
• the fair value estimation of share-based awards included in the consolidated statements of financial position and
the inputs used in accounting for share-based compensation expense in the consolidated statements of income;
• the provision for income taxes which is included in the consolidated statements of income and composition of
deferred income tax asset and liabilities included in the consolidated statement of financial position;
• the recognition of deferred income tax assets, amounts recorded for uncertain tax positions, the measurement of
income tax expense and indirect taxes included in the consolidated statement of financial position;
• the inputs used in determining the net present value of the liability for provisions related to decommissioning and
restoration included in the consolidated statements of financial position; and,
• the inputs used in determining the various commitments and contingencies accrued in the consolidated statements
of financial position.
2. Basis of Consolidation and Summary of Significant Accounting Policies (Continued)
u) Significant Accounting Judgments and Estimates (Continued)
