28 | P a g e 2. Significant Accounting Policies (continued)  Notes to Consolidated Financial Statements For the years ended June 30, 2010 and 2009 MONUMENT MINING LIMITED l. Revenue recognition  m. Foreign currency translation  n. Financial instruments  o. Warrants  p. Capital leases  The costs of assets acquired under capital leases are capitalized and amortized over their useful lives. An offsetting liability is  established to reflect the future obligation under capital leases. This liability is reduced by future principal payments. Share issuances that include a warrant are bifurcated into a share and warrant component for accounting purposes. The share  and warrant components are bifurcated by allocating unit proceeds equal to the market price of the Company’s stock to the  share component and the residual amount of the unit proceeds to the warrant component. The warrant component is recorded  in contributed surplus and is transferred to capital stock upon exercise of the underlying warrant. Transaction costs that are directly attributable to the acquisition or issuance of financial instruments that are classified as other  than held-for-trading, which are expensed as incurred, are included in the initial carrying value of such instruments.  The Company employs foreign exchange forward contracts from time to time to mitigate the risk of changes in currency  exchange rates between the Canadian dollar and Malaysian ringgit. The Company does not apply hedge accounting and  accordingly changes in fair value of the contracts are recorded in net income in the period they occur. The fair value of those  contracts is estimated by reference to quoted market prices for actual or similar instruments where available. Financial instruments are classified into one of five categories: held-for-trading, held-to-maturity investments, loans and  receivables, available-for-sale financial assets or other financial liabilities. All financial instruments are measured at fair value on  initial recognition and recorded on the balance sheet. Subsequent measurement and changes in fair value depend on their  initial classification as follows: held-for-trading financial assets and liabilities are measured at fair value and changes in fair  value are recognized in net income. Available-for-sale financial assets are measured at fair value with changes in fair value  recorded in other comprehensive income. When a decline in the fair value of an available-for-sale financial asset has been  recognized in comprehensive income, and there is objective evidence that the impairment is other than temporary, the  cumulative loss that had been previously recognized in accumulated other comprehensive income is removed from  accumulated other comprehensive income and recognized in net income even though the financial asset has not been de- recognized. Loans and receivables, held-to-maturity investments and other financial liabilities are measured at amortized cost.  The Company’s financial instruments consist of cash and cash equivalents, restricted cash, forward contracts, accounts  receivable (excluding refundable taxes) and accounts payable and accrued liabilities.  Monetary assets and liabilities are translated into Canadian dollars at exchange rates in effect at the balance sheet date. Non- monetary assets and liabilities are translated at the exchange rates prevailing at the time of acquisition or assumption unless  such items are carried at market, in which case they are translated at the exchange rates in effect at the balance sheet date. Interest income and operating expenses are translated at the exchange rates prevailing on the transaction date. Gains or losses  on translation are recorded in the statement of operations.  Revenue from gold sales is charged against construction when generated from commissioning of the plant; to mineral  properties when generated from pre-commercial production; and to operations when generated from commercial production.  Revenue generated from by-product such as silver is recognized in the same manner, however, is credited to the cost of goods  sold when its percentage of revenue is less than 5% of total revenue.  The Company’s operations produce gold in dore form, which is refined to pure gold bullion prior to sale primarily in the London  spot market or under gold sale contracts. Revenue from the sale of metals is recognized in the financial statements when the  following conditions are met: persuasive evidence of an arrangement exists; title and risk passes to buyer, the price is fixed or  determinable; and collectability is reasonably assured.