## NOTE 43 - INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) (continued) 

## 3. Income Tax 

Income tax will be calculated based on the “balance sheet” approach, replacing the current income statement method. This may result in the recognition of additional deferred tax assets and liabilities. In addition, tax losses will be recognised as an asset to the extent that future taxable profits are probable. This may result in greater deferred tax assets compared to the existing parameters of recognising future income tax benefits when tax losses are virtually certain of being realised and timing differences where realisation is assured beyond reasonable doubt. 

## Impact on Resolute 

On adoption, the change to the balance sheet approach may result in the recognition of additional deferred tax assets and liabilities with a corresponding impact to retained earnings. Post adoption any movements in deferred assets and liabilities will be recognised in the Statement of Financial Performance. 

## 4. Provision for Environmental Rehabilitation 

Environmental obligations associated with the retirement or disposal and/or exploration properties will be recognised when the disturbance occurs and is based on the extent of damage incurred. The provision is measured as the present value of the future expenditure. A corresponding rehabilitation asset is also recognised to the extent that the obligation relates to development. On an ongoing basis, the rehabilitation liability will be remeasured at each reporting period in line with the change in the time value of money (recognised as an interest expense in the Statement of Financial Performance and an increase in the provision), and additional disturbances/change in the rehabilitation cost will be recognised as additions/changes to the corresponding asset and rehabilitation liability. The rehabilitation asset will be amortised to the statement of financial performance on the same basis as the development asset. Currently Resolute has a rehabilitation liability, which progressively increases (with the corresponding amount booked in the Statement of Financial Performance) over the life of the operation. 

## Impact on Resolute 

On transition, Resolute will be required to: 

• Remeasure the existing environmental rehabilitation provision to the present value of the future expenditure; 

• Estimate the value that would have been included in the cost of the asset when the liability arose; and 

• Amortise the asset to the date of transition. 

Retained earnings will be impacted to the extent that this net position differs from the existing provision. 

On an ongoing basis, the Statement of Financial Performance will recognise both an interest expense and amortisation of rehabilitation asset. 

## 5. Share Based Payments 

Under AASB 2 “Share Based Payments”, the company will be required to determine the fair value of options issued to employees as remuneration and recognise an expense in the statement of financial performance. This standard is not limited to options and also extends to other forms of equity-based remuneration. It applies to all share-based payments issued after 7 November 2002, which have not vested as at 1 January 2005. 

## Impact on Resolute 

To the extent that any of the remuneration options on issue have not vested by 1 January 2005, they will need to be recognised and measured in accordance with AASB 2. 

Reliable estimation of the future financial effects of this change in accounting policy is impracticable as the details of the future equity-based remuneration plans are unknown. 

