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Notes to the Financial Statements
Washington H. Soul Pattinson and Company Limited
Annual Report 2016
88
Revenue and Expenses
NOTE 17
EXPENSES
17
Accounting policies –
Expenses
Depreciation and amortisation
Depreciation and amortisation expenses are non-cash expenses and represent the allocation of the cost of certain
fixed assets such as buildings, plant and equipment and mining reserves and development, over the time that the
asset is expected to generated revenue for the Group.
Different depreciation rates apply to each asset and are included in the notes for each asset.
Impairment
Impairment charges are non-cash expenses and are recognised when the carrying value of an asset or group of
assets is no longer recoverable either through the use or sale of the asset. Recoverable value assessment for each
asset class is discussed within the notes for each asset.
Impairment losses are expensed to the income statement unless the asset has been previously revalued. Where
the asset has been previously revalued, the reduction in value is recognised as a reversal to the extent of the
previous revaluation, and any residual is recognised as an impairment expense.
An impairment expense recognised on goodwill or a long term equity investment is permanent and is prohibited
from being reversed.
For all other assets, an assessment is made at each reporting date as to whether an impairment loss recognised
in a prior period no longer exists or has decreased. If it is determined that the impairment is no longer required,
the carrying value of the asset is increased and the previously recognised impairment expense is reversed in the
income statement.
Employee benefits expense
Employee benefits expense includes the payment of salary and wages (including the value of non-cash benefits
such as share-based payments), sick leave and accruals for annual leave and long service leave.
Finance costs
Finance costs are expensed when incurred, except for interest incurred on borrowings that relate to the
construction of Investment properties. This interest was included in the cost of the properties.
Exploration costs expensed
Exploration costs that do not satisfy the criteria to be capitalised are expensed. Refer note 26 for discussion
on the criteria.