Page 69 - ar2012

31 December 2012
NOTESTO FINANCIAL STATEMENTS
GEO ENERGY RESOURCES LIMITED | Annual Report 2012 65
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
REVENUE RECOGNITION – Revenue is measured at the fair value of the consideration received or receivable
and represents amounts receivable for goods and services provided in the normal course of business, net of
discounts and sales related taxes.
Sales of coal
Revenue from the sale of coal is recognised when all the following conditions are satisfed:
 the Group has transferred to the buyer the signifcant risks and rewards of ownership of the coal;
 the Group retains neither continuing managerial involvement to the degree usually associated with
ownership nor effective control over the coal sold;
 the amount of revenue can be measured reliably;
 it is probable that the economic benefts associated with the transaction will fow to the entity; and
 the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Mining services
Revenue from rendering of mining services that are of a short duration is measured at the fair value of the
consideration received or receivable when services are completed.
Rental services
Rental services are recognised on a straight-line basis over the term of the relevant lease.
Interest income
Interest income is accrued on a time apportionment basis, by reference to the principal outstanding and at the
effective interest rate applicable.
BORROWING COSTS – Borrowing costs directly attributable to the construction or production of qualifying assets,
which are assets that necessarily take a substantial period of time to get ready for their intended use or sale,
are added to the cost of those assets, until such time as the assets are substantially ready for their intended
sale. Investment income earned on the temporary investment of specifc borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in proft or loss in the period in which they are incurred.
RETIREMENT BENEFIT COSTS – Payments to defned contribution retirement beneft plans are charged as an
expense when employees have rendered the services entitling them to the contributions. Payments made to state-
managed retirement beneft schemes, such as the Singapore Central Provident Fund, are dealt with as payments
to defned contribution plans where the Group’s obligations under the plans are equivalent to those arising in a
defned contribution retirement beneft plan.
The cost of providing defned post-employment benefts is determined using the Projected Unit Credit Method. The
accumulated unrecognised actuarial gains and losses that exceed 10% of the present value of the Group’s defned
beneft obligations are recognised in proft or loss on a straight-line basis over the expected average remaining
working lives of the participating employees. Past service cost is recognised immediately to the extent that the
benefts are already vested, and otherwise is amortised on a straight-line basis over the average period until the
benefts become vested.
The retirement benefts obligation recognised in the consolidated statement of fnancial position represents the
present value of the defned beneft obligation, as adjusted for unrecognised actuarial gains and losses and
unrecognised past service cost.