ABN 61 058 454 569
ICON ENERGY LIMITED
2015 Annual Report
57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
57
FOR THE YEAR ENDED 30 JUNE 2015
(f)
Exploration, Evaluation and Development Expenditure
(g)
Research and Development Tax Incentive
(h)
Interests in Joint Arrangements
Joint Operations
(i)
Trade Creditors
(j)
Cash and Cash Equivalents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry
forward costs in relation to that area of interest.
When commercial production commences, the accumulated costs for the relevant area of interest are amortised
over the life of the area according to the rate of depletion of the economically recoverable reserves. Any costs of
site restoration are provided for during the relevant production stages and included in the costs of that stage. The
capitalised costs relating to site restoration are amortised over the life of the petroleum asset.
For the purpose of the consolidated statements of cash flows, cash and cash equivalents include cash and cash
equivalents as above, net of outstanding bank overdrafts.
Investments in joint arrangements are classified as either joint operations or joint ventures. The classification of
joint arrangements is determined based on the contractual rights and obligations of parties to the joint
arrangements rather than the legal structure of joint arrangement. The entity has only joint operations.
Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of site
restoration, there is uncertainty regarding the nature and extent of the restoration due to community expectations
and future legislation. Accordingly, the costs have been determined on the basis that the restoration will be
completed within one year of abandoning the site.
NOTE 1 - STATEMENT OF ACCOUNTING POLICIES (Continued)
The Research and Development Tax Incentive (RDTI) is a 45% Refundable tax offset that is calculated as 45% of
the eligible research and development expenditure that has been incurred by the company. The Directors
consider any payment arising from the RDTI to be a form of government assistance and are of the view that it is
appropriate to develop an accounting policy that is anagoulous to AASB120
Accounting for Governement Grants
and Disclosure of Government Assistance
.
As such, RTDI refund are recognised when there is sufficient degree of certainty that the company will comply
with the conditions attaching to RDTI and that the payment will be received. Such refund are recognised in the
Statement of Profit or loss and Other Comprehensive Income on a systematic basis over the periods in which the
company recognises as expenses the related costs for which the assistance is intended to compensate. The
proportion of the refund that relates to capitalised exploration expenditure is deducted against the carrying amount
of the related non-current assets. Any remaining proportion that cannot be recognised on either of the preceding
basis is recognised in the Statement of Profit or loss and Other Comprehensive Income as “income from research
and development claimâ€.
Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area
of interest. These costs are only carried forward to the extent that they are expected to be recouped through the
successful development of an area or sale of the respective area of interest or where activities in the area have
not yet reached a stage which permits reasonable assessment of the existence of economically recoverable
reserves and active and significant.
Cash and cash equivalents in the consolidated statement of financial position comprise cash at bank and in hand
and short-term deposits with an original maturity of 3 months or less that are readily convertible to known
amounts of cash and which are subject to insignificant risk of changes in value.
The consolidated entity has interests in joint arrangements that are joint operations. As a joint operator, the
consolidated entity recognises its direct right to the assets, liabilities, revenues and expenses of joint operations
and its share of any jointly held or incurred assets, liabilities, revenues and expenses. These are included in the
respective items of the consolidated statement of financial position and consolidated statement of comprehensive
income.
The entity accounts for the assets, liabilities, revenues and expenses relating to its interest in a joint operation in
accordance with the AASBs applicable to the particular assets, liabilities, revenues and expenses.
A liability is recorded for the goods and services received prior to balance date, whether invoiced to the company
or not that remain unpaid. Trade creditors are normally settled within 30 days.
Accumulated costs in relation to an abandoned area are written off in full against profit/(loss) in the year in which
the decision to abandon the area is made.
