Page 143 - Demo - Oz Min

Notes to the Consolidated Financial Statements
Net Cash and Capital Employed
The depreciation methods adopted by the Consolidated Entity are provided in the table below:
Category
Freehold land
Buildings and other infrastructure Short term plant and equipment Processing plant
Mine property and development
Depreciation method
Not depreciated
Straight line over life of mine
Straight line over life of asset
Units of ore milled over mining inventory
Units of ore extracted over mining inventory applicable to the development
Depreciation of assets commences when the assets are ready for their intended use. The depreciation of mine property and development commences when the mine is commissioned or deemed ready for use.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each reporting period and adjusted prospectively, if appropriate. Where depreciation rates are changed, the net written down value of the asset is depreciated from the date of the change in accordance with the new depreciation rate, with the change accounted for as a change in accounting estimate.
During 2016, the useful life of mine property and development and processing plant assets were reassessed and are now based on mining inventory, which includes both resources and reserves. This more closely aligns benefits received by the assets from their use.
Ore reserves and resources estimates
The estimated quantities of economically recoverable reserves and resources are based upon interpretations of geological and geophysical models and require assumptions to be made regarding exchange rates, commodity prices, future capital requirements and future operating performance.
Changes in reported reserves and resources estimates can impact the carrying value of property, plant and equipment including deferred mining expenditure, intangible assets, capitalised exploration, provisions for mine rehabilitation, restoration and dismantling obligations, recognition of deferred tax assets, as well as the amount of depreciation charged to the Income Statement.
Changes in the carrying value of the assets may arise principally through changes in the income that can be economically generated from each project. Changes in depreciation expense may arise through a change in the useful life over which property, plant and equipment is depreciated.
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Annual and Sustainability Report 2016