Notes to the Consolidated Financial Statements for the year ended 30 June 2023 3. Significant accounting estimates and judgements (continued) Investment in joint venture The Group determines whether it is necessary to recognise an impairment loss on its investment in joint venture. At each reporting date, the Group determines whether there is objective evidence that the investment in the joint venture is impaired. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of the joint venture and carrying value, and then recognises the loss within “Share of joint venture profit/loss” in the statement of profit or loss. Upon loss of significant influence or joint control over the joint venture, the Group measures and recognises any retained investment at its fair value. Any difference between the carrying amount of the joint venture upon loss of significant influence or joint control and the fair value of the retained investment and proceeds from disposal is recognised in profit or loss. Convertible loan The Group applies the low credit risk simplification. At each reporting date, the Group evaluates whether the debt instrument is considered to have low credit risk using all reasonable and supportable information that is available without undue cost or effort. 4. New and revised accounting standards and interpretations The Group adopted all new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board that are relevant to its operations and are mandatory for the current financial reporting period beginning 1 July 2022. Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. Management is not expecting a significant impact on the financial report when the new standards/interpretations are adopted. 5. Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (CODM). The CODM is responsible for allocating resources and assessing performance of the operating segments and has been identified as the Board. Current taxes and deferred taxes are not allocated to the segments as they are managed on a group basis. The Group’s operating segments are as follows: – South Atlantic project – Project consists of mineral sands tenements located in Southeast Brazil. On 28 February 2023, Sheffield executed a binding investment agreement (RGM Option Agreement) with Mineração Santa Elina Indústria e Comércio S/A. and Kromus Xi Fundo De Investimento Em Participações, owners of Rio Grande Mineração S/A (RGM). Please refer to Note 12 for additional information. – Thunderbird project – Project consists of mineral sands tenements located in the Canning Basin that form part of the Thunderbird mineral sand mining operation held by Thunderbird Operations Pty Ltd, subsidiary of Kimberley Mineral Sands Pty Ltd (KMS). Please refer to Note 8 for additional information. – Other unallocated items – corporate expenses and share-based payments expenses are examples of items that are not allocated to operating segments as they are not considered part of the core operation of any segment. 2023 South Atlantic Project $’000 Thunderbird Project $’000 Other $’000 Total $’000 Segment Reporting Other income – – 608 608 Employee benefits expenses – – (1,605) (1,605) Share-based payments expenses – – (914) (914) Corporate expenses – – (1,331) (1,331) Share of joint venture loss – (5,368) – (5,368) Segment loss before tax – (5,368) (3,242) (8,610) Segment assets 1,508 143,938 24,471 169,917 Segment liabilities – – 302 302 Other disclosures Investment in joint venture – 143,938 – 143,938 Convertible loan 1,508 – – 1,508 38 Sheffield Resources Limited Annual Report 2023
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