Note 1. Summary of Significant Accounting Policies (continued) Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity. (g) Cash and cash equivalents Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short‑term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the Statement of Financial Position. (h) Other receivables Other receivables are recognised at amortised cost, less any allowance for expected credit losses. (i) Financial assets at fair value through profit or loss Financial assets where the contractual cash flows are not solely payments of principal and interest are classified as financial assets at fair value through profit or loss. The shares held in listed companies United Lithium Corp and NewPeak Metals Ltd (refer to Note 8), do not satisfy the solely payment of principal and interest test and are therefore classified as financial assets and recorded in the statement of financial position at fair value with net changes in fair value recognised in the profit or loss. (j) Leases All leases are accounted for by recognising a right-of-use asset and a lease liability except for leases of low value assets and leases with a term of 12 months or less. Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with the discount rate determined by reference to the group’s incremental borrowing rate on commencement of the lease. On initial recognition, the carrying value of the lease liability also includes: – amounts expected to be payable under any residual value guarantee; – the exercise price of any purchase option granted in favour of the group if it is reasonably certain to exercise that option; – any penalties payable for terminating the lease, if the term of the lease has been estimated on the basis of termination option being exercised. Right of use assets are initially measured at the amount of the lease liability, reduced for any lease incentives received, and increased for: – lease payments made at or before commencement of the lease; – initial direct costs incurred; and – the amount of any provision recognised where the group is contractually required to dismantle, remove or restore the leased asset. Subsequent to initial measurement lease liabilities increase as a result of interest charged at a constant rate on the balance outstanding and are reduced for lease payments made. Right-of-use assets are amortised on a straight-line basis over the remaining term of the lease or over the remaining economic life of the asset if, rarely, this is judged to be shorter than the lease term. Lease liabilities are remeasured when there is a change in future lease payments arising from a change in an index or rate or when there is a change in the assessment of the term of any lease. Payments associated with short-term leases and leases of low-value assets are recognised on a straightline basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low‑value assets comprise IT-equipment and small items of office furniture. (k) Exploration and evaluation expenditure Exploration and evaluation expenditure incurred by or on behalf of the Group is accumulated separately for each area of interest. Such expenditure comprises net direct costs and an appropriate portion of related overhead expenditure, but does not include general overheads or administrative expenditure not having a specific focus with a particular area of interest. Notes to the Financial Statements for the year ended 30 June 2023 40 Sunstone Metals Limited Annual Report 2023
RkJQdWJsaXNoZXIy MjE2NDg3