Axiom 2014 Annual Report - page 56

Notes to the Financial Statements
for the year ended 30 September 2014
54
Axiom Mining Limited
2. Significant accounting policies (continued)
Other long-term employee benefits
Provision is made for employees’ long service leave and
annual leave entitlements not expected to be settled
wholly within 12 months after the end of the annual
reporting period in which the employees render the
related service. Other long-term employee benefits
are measured at the present value of the expected
future payments to be made to employees. Expected
future payments incorporate anticipated future wage
and salary levels, durations of service and employee
departures and are discounted at rates determined by
reference to market yields at the end of the reporting
period on government bonds that have maturity
dates that approximate the terms of the obligations.
Any re-measurements for changes in assumptions of
obligations for other long-term employee benefits are
recognised in profit or loss in the periods in which
the changes occur.
The Group’s obligations for long-term employee
benefits are presented as non-current provisions in
its statement of financial position, except where the
Group does not have an unconditional right to defer
settlement for at least 12 months after the end of the
reporting period, in which case the obligations are
presented as current provisions.
o. Share-based payments
The fair value of share options granted to employees
and others is recognised as an employee cost with
a corresponding increase in a reserve within equity.
The fair value of shares granted to service providers is
recognised as an expense and classified by nature. The
fair value is measured at grant date using the Black-
Scholes option pricing model, taking into account the
terms and conditions upon which the options were
granted. Where the employees have to meet vesting
conditions before becoming unconditionally entitled to
the options, the total estimated fair value of the options
is spread over the vesting period, taking into account
the probability that the options will vest.
During the vesting period, the number of share options
that is expected to vest is reviewed. Any adjustment
to the cumulative fair value recognised in prior
years is charged or credited to the profit or loss for
the year of the review, unless the original employee
expenses qualify for recognition as an asset, with a
corresponding adjustment to the reserve. On vesting
date, the amount recognised as an expense is adjusted
to reflect the actual number of options that vest (with
a corresponding adjustment to the reserve) except
where forfeiture is only due to not achieving vesting
conditions that relate to the market price of the
Company’s shares.
p. Goods and services tax (GST)
Revenue, expenses and assets are recognised net of the
amount of goods and services tax (GST), except where
the amount of GST incurred is not recoverable from the
taxation authority. In these circumstances, the GST is
recognised as part of the cost of acquisition of the asset
or as part of the expenses. Receivables and payables are
stated with the amount of GST included. The net amount
of GST recoverable from, or payable to, the taxation
authority is included as a current asset or liability in the
balance sheet.
Cash flows are included in the cash flow statement
on a gross basis. The GST components of cash flows
arising from investing and financing activities which are
recoverable from, or payable to, the taxation authority
are classified as operating cash flows.
q. Provisions and contingent liabilities
Provisions are recognised for liabilities of uncertain
timing or amount when the Group or the Company has
a legal or constructive obligation arising as a result of
a past event, it is probable that an outflow of economic
benefits will be required to settle the obligation and a
reliable estimate can be made. Where the time value
of money is material, provisions are stated at the
present value of the expenditure expected to settle the
obligation.
Where it is not probable that an outflow of economic
benefits will be required, or the amount cannot be
estimated reliably, the obligation is disclosed as a
contingent liability, unless the probability of outflow of
economic benefits is remote. Possible obligations, whose
existence will only be confirmed by the occurrence or
non-occurrence of one or more future events are also
disclosed as contingent liabilities unless the probability
of outflow of economic benefits is remote.
r. Revenue recognition
Provided that it is probable that the economic benefits
will flow to the Group and the revenue and costs,
if applicable, can be measured reliably, revenue is
recognised in profit or loss as follows:
––
interest income is recognised as it accrues using the
effective interest method
––
sundry income is recognised at the fair value of the
consideration received or receivable.
s. Translation of foreign currencies
Foreign currency transactions during the year are
translated at the foreign exchange rates ruling at the
transaction dates. Monetary assets and liabilities
denominated in foreign currencies are translated at
the foreign exchange rates ruling at the balance sheet
date. Exchange gains and losses are recognised in
profit or loss.
GROUP FINANCIAL REPORT
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