Notes to the consolidated financial statements 30 June 2022 (continued) 13 Property, plant and equipment (continued) (b) Recognition and measurement Property, plant and equipment are stated at historical cost less accumulated depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. It also includes the direct cost of bringing the asset to the location and condition necessary for first use and the estimated future cost of rehabilitation, where applicable. The assets are subsequently measured at cost less accumulated depreciation and any accumulated impairment losses. 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 profit or loss during the reporting period in which they are incurred. Depreciation Land is not depreciated. Depreciation on other assets is calculated using either units-of-production or straight-line depreciation as follows: Depreciation periods are primarily: Buildings 5 - 10 years Mining plant and equipment 2 - 10 years Motor vehicles 3 - 8 years Furniture and fittings 3 - 10 years Depreciation is expensed as incurred, unless it relates to an asset or operation in the construction phase, in which case it is capitalised. Derecognition An item of property, plant and equipment is derecognised when it is sold or otherwise disposed of, or when its use is expected to bring no future economic benefits. Any gain or loss from derecognising the asset (being the difference between the proceeds of disposal and the carrying amount of the asset) is included in the profit or loss in the period the item is derecognised. The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. (c) Key estimates and judgements The estimations of useful lives, residual values and depreciation methods require significant management judgements and are regularly reviewed. If they need to be modified, the depreciation and amortisation expense is accounted for prospectively from the date of the assessment until the end of the revised useful life (for both the current and future years). Notes to the consolidated financial statements 30 June 2022 (continued) 14 Leases (a) Amounts recognised in the balance sheet The balance sheet shows the following amounts relating to leases: 2022 $M 2021 $M Right-of-use assets Buildings 5.8 5.5 Mining plant and equipment 48.0 19.2 Motor vehicles 1.8 - 55.6 24.7 Lease liabilities Current 20.1 4.4 Non-current 37.3 20.6 57.4 25.0 Additions to the right-of use assets during the year were $20.0 million (2021: $1.0 million). The additions during the year relate to the extension of mining services and haulage contracts which have been recognised as right-of-use assets. The Group also acquired right-of-use assets totalling $15.7 million following the acquisition of Western Areas Limited during the period. (b) Amounts recognised in the statement of profit or loss The statement of profit or loss includes the following amounts relating to leases: 2022 $M 2021 $M Depreciation charge of right-of-use assets Buildings 0.9 0.9 Mining plant and equipment - continuing operations 3.9 3.8 Mining plant and equipment - discontinued operation - 1.4 4.8 6.1 Interest expense (included in borrowing and finance costs) - continuing operations 0.9 1.1 Interest expense (included in borrowing and finance costs) - discontinued operation - 0.4 Total interest expense 0.9 1.5 Space The total cash outflow for leases for the financial year to 30 June 2022 was $5.3 million (2021: $7.6 million). (c) Recognition and measurement The Group leases office space and equipment. Rental contracts are typically made for fixed periods up to five years, but may have extension options as described below. Contracts may contain both lease and non-lease components. The Group allocated the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may not be used as security for borrowing purposes. Notes to the consolidated financial statements 30 June 2022 Notes to the consolidated financial statements 30 June 2022 112 — IGO ANNUAL REPORT 2022 IGO ANNUAL REPORT 2022 — 113
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