ANNUAL REPORT 2011 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued  (j) Inventories (k)  Investments and other financial assets Inventories of work in progress and finished goods are stated at the lower of cost and net realisable value. Cost comprises direct  material, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the  basis of normal operating capacity. Costs are assigned to individual items of inventory on the basis of weighted average costs in  getting such inventories to their existing location and condition, based on weighted average costs incurred during the period in  which such inventories were produced. Inventories of consumable supplies and spare parts expected to be used in production are  valued at weighted average cost. Obsolete or damaged inventories of such item are valued at net realisable value. Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active  market. They are included in current assets, except for those with maturities greater than 12 months after the reporting period  which are classified as Non-current assets. Loans and receivables are included in receivables (note 8) in the statement of financial  position. Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category  if acquired principally for the purpose of selling in the short term. Derivatives are classified as held for trading unless they are  designated as hedges. Assets in this category are classified as current assets if they are expected to be settled within 12 months;  otherwise they are classified as Non-current. The Group classifies its financial assets in the following categories: financial assets at fair value through profit or loss, loans and  receivables and available-for-sale financial assets. The classification depends on the purpose for which the investments were  acquired. Management determines the classification of its investments at initial recognition and re-evaluates this designation at  each reporting date. Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other  categories. They are included in Non-current assets unless the investment matures or management intends to dispose of the  investment within 12 months of the end of the reporting period. Investments are designated as available-for-sale if they do not  have fixed maturities and fixed or determinable payments and management intends to hold them for the medium to long term.  Purchase and sale of investments are recognised on trade-date, the date on which the Group commits to purchase or sell the  asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been  transferred and the Group has transferred substantially all the risks and rewards of ownership. When securities classified as available-for-sale are sold, the accumulated fair value adjustments recognised in other comprehensive  income are reclassified to profit or loss as gains and losses on sale of available-for-sale financial assets. At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value  through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of  financial assets carried at fair value through profit or loss are expensed in profit or loss. Loans and receivables are subsequently carried at amortised cost using the effective interest method. Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Gains  or losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are presented in  profit or loss within devaluation of gold put options in the period in which they arise. Changes in value of non-monetary securities  classified as available-for-sale are recognised in other comprehensive income. Details on how the fair value of financial instruments is determined are disclosed in note 17. 51 Measurement Recognition and derecognition Classification (i)  Financial assets at fair value through profit or loss (ii)  Loans and receivables (iii)  Available-for-sale financial assets