Icon Energy Limited Annual Report 2017

ICON ENERGY LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017 (t) Inventories Inventories are valued at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Cost comprises direct materials and delivery costs, direct labour, import duties and other taxes, an appropriate proportion of variable and fixed overhead expenditure based on normal operating capacity, and, where applicable, transfers from cash flow hedging reserves in equity. Costs of purchased inventory are determined after deducting rebates and discounts received or receivable. Inventories consist of drilling consumables predominantly chemicals and proppant. NOTE 25 - STATEMENT OF ACCOUNTING POLICIES (Continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2017 67 ICON ENERGY ANNUAL REPORT 2017 FINANCIAL REPORT