Icon Energy Limited Annual Report 2016

ICON ENERGY LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 Impairment (o) (p) Foreign Currency Transactions and Balances (q) Impairment NOTE 27 - STATEMENT OF ACCOUNTING POLICIES (Continued) Where it is not possible to estimate the recoverable amount of an individual asset, the consolidated entity estimates the recoverable amount of the cash-generating unit to which the asset belongs. Functional and presentation currency The functional currency of each of the controlled entities is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars which is the parent entity’s functional and presentation currency Group The financial results and position of foreign operations whose functional currency is different from the group’s presentation currency are translated as follows: - assets and liabilities are translated at year-end exchange rates prevailing at that reporting date; - income and expenses are translated at average exchange rates for the period; and At each reporting date, the consolidated entity assesses whether there is objective evidence that a financial instrument has been impaired. Impairment of Assets At each reporting date, the directors review the carrying values of its assets which include exploration, evaluation and development expenditures and property, plant and equipment, to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value $ny e[cess of the asset’s carrying value over its recoverable amount is e[pensed and included in profit or loss - retained earnings are translated at the exchange rates prevailing at the date of the transaction. ([change differences arising on translation of foreign operations are transferred directly to the group’s foreign currency translation reserve in the consolidated statement of financial position and are recognised as other comprehensive income. Critical accounting estimates and judgments The directors evaluate estimates and judgments incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the group. The resulting accounting estimates may not equal the related actual results. The estimates, assumptions and judgements that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. The directors assess impairment at each reporting date by evaluating conditions specific to the entity that may lead to impairment of assets including exploration and evaluation expenditure. Where an impairment trigger exists, the recoverable amount of the asset is determined. Any excess of asset's carrying value over recoverable amount is expensed and included in profit and loss. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2016 FINANCIAL REPORT 65 ICON ENERGY ANNUAL REPORT 2016