meaning of “currently has a legally enforce-
able right of set-off” and that some gross 
settlement systems may be considered 
equivalent to net settlement.
dd . Parent entity financial information
The financial information for the parent entity 
Kingsgate Consolidated Limited, disclosed in 
Note 32 has been prepared on the same basis as 
the consolidated financial statements except as 
set out below:
Investments in subsidiaries
Investments in subsidiaries are accounted for at 
cost in the financial statements of Kingsgate.
Share-based payments
The issue by the Company of equity instruments 
to extinguish liabilities of a subsidiary under-
taking in the Group is treated as a capital contri-
bution to that subsidiary undertaking.
3.  Critical accounting  
estimates, assumptions  
and judgements
Estimates and judgements are continually 
evaluated and are based on historical experience 
and other factors, including expectation of 
future events that may have a financial impact 
on the Group and that are believed to be 
reasonable under the circumstances. The Group 
makes estimates and assumptions concerning 
the future. Actual results may differ from these 
estimates under different assumptions and 
conditions. The estimates and assumptions that 
could materially affect the financial position and 
results are discussed below:
(i)  Mineral resources and  
ore reserves estimates
The Group determines and reports ore reserves 
under the Australian Code for Reporting of 
Mineral Resources and Ore Reserves December 
2004, known as the JORC Code. The information 
on mineral resources and ore reserves was 
prepared by or under the supervision of 
Competent Persons as defined in the JORC 
Code. 
There are numerous uncertainties inherent in 
estimating mineral resources and reserves and 
assumptions that are valid at the time of estima-
tion may change significantly when new infor-
mation becomes available.
Changes in reported ore reserves may affect the 
Group’s financial position and results, including 
asset carrying value, depreciation and amortisa-
tion expenses using units-of-production 
method, provision for restoration and rehabilita-
tion and stripping costs if the stripping ratios 
are revised.
(ii) Exploration and evaluation assets
Exploration and evaluation expenditure for each 
area of interest is carried forward as an asset 
provided certain conditions are met (Note 2o). 
Exploration and evaluation assets are assessed 
for impairment when facts and circumstances 
suggest that the carrying amount of an explora-
tion and evaluation asset may exceed its recov-
erable amount. These calculations and reviews 
require the use of assumptions and judgement. 
The related carrying amounts are disclosed in 
Note 13.
(iii) Deferred mining expenditure
The Group defers mining costs incurred during 
the production stage of its operations. Changes 
in an individual mine’s design will generally result 
in changes to the life of mine waste to contained 
gold ounce (life of mine) ratio. Changes in other 
technical or economic parameters that impact 
reserves will also have an impact on the life of 
mine ratio even if they do not affect the mine’s 
design. Changes to the life of mine are 
accounted for prospectively.