between the asset’s carrying amount and the 
present value of estimated future cash flows, 
excluding future credit losses that have not been 
incurred. The cash flows are discounted at the 
financial asset’s original effective interest rate. 
The loss is recognised in the statement of 
comprehensive income.
k . Derivative financial instruments
Derivative financial instruments are used by the 
Group to protect against the Group’s Australian 
dollar gold price risk exposures. The Group does 
not apply hedge accounting and accordingly all 
fair value movements on derivative financial 
instruments are recognised in the profit or loss.
Derivative financial instruments are stated at 
fair value on the date a derivative contract is 
entered into and are subsequently remeasured 
to their fair value at each reporting date. The 
resulting gain or loss is recognised in the state-
ment of comprehensive income immediately.
l . Property, plant and equipment
Property, plant and equipment are stated at 
historical cost less depreciation. Historical cost 
includes expenditure that is directly attributable 
to the acquisition of the items. 
Subsequent costs are included in the asset’s 
carrying amount or recognised as a separate 
asset, as appropriate, only when it is probable 
that future economic benefits associated with 
the item will flow to the Group and the cost of 
the item can be measured reliably. The carrying 
amount of any component accounted for as a 
separate asset is derecognised when replaced. 
All other repairs and maintenance are charged to 
the statement of comprehensive income during 
the reporting period in which they are incurred.
Depreciation
Depreciation and amortisation of mine build-
ings, plant, machinery and equipment is 
provided over the assessed life of the relevant 
mine or asset, whichever is the shorter.
Depreciation and amortisation is determined on 
a units-of-production basis over the estimated 
recoverable reserves from the related area. In 
some circumstances, where conversion of 
resources into reserves is expected, some 
elements of resources may be included. For mine 
plant, machinery and equipment, which have an 
expected economic life shorter than the life of 
the mine, a straight line basis is adopted.
The expected useful lives are as follows:
〉〉 mine buildings – the shorter of applicable 
mine life and 25 years;
〉〉 plant, machinery and equipment – the 
shorter of applicable mine life and 3–15 
years depending on the nature of the asset.
The estimated recoverable reserves and life of 
each mine and the remaining useful life of each 
class of asset are reassessed at least annually. 
Where there is a change in the reserves during 
the period, depreciation and amortisation rates 
are adjusted prospectively from the beginning of 
the reporting period.
Major spares purchased specifically for a partic-
ular plant are capitalised and depreciated on the 
same basis as the plant to which they relate. 
Impairment
An asset’s carrying amount is written down 
immediately to its recoverable amount if the 
asset’s carrying amount is greater than its 
estimated recoverable amount (Note 2f).
Derecognition
An item of property, plant and equipment is 
derecognised upon disposal or when no future 
economic benefits are expected to arise from 
the continued use of the asset.
Any gain or loss arising on derecognition of the 
asset (calculated as the difference between the 
net disposal proceeds and the carrying amount 
of the item) is included in the profit or loss in the 
period the item is derecognised.