IFRS for the Minerals and Mining Sector

There are diverse accounting practices among companies in the worldwide extractive industry. The IASB has commissioned a research project to review accounting practices for extractive activities.

To provide some guidance and a transition for entities in the extractive industry that are adopting IFRS, the IASB issued IFRS 6 Exploration for and Evaluation of Mineral Resources, in December 2004. The Standard applies to expenditures incurred in connection with the exploration and evaluation of mineral resources.

This course summarizes the accounting and disclosure requirements of IFRS 6 and discusses the current status of the IASB’s work on accounting for extractive activities. Key accounting standards that affect the industry are also given in-depth coverage, such as IFRS rules on impairment of assets, recognition and measurement of assets, revaluations of certain qualifying assets, decommissioning and site restoration costs, accounting for reserves, disclosures, and hedge accounting. The program also provides guidance on accounting issues relating to joint ventures and production sharing agreements and includes an overview of the interpretation IFRIC 20 “Stripping Costs in the Production Phase of a Surface Mine”.

This comprehensive program also includes a review of US GAAP relevant to extractive industries.

The course answers questions such as:

• What are the accounting and disclosure requirements of IFRS 6 Exploration for and Evaluation of Mineral Resources?
• What are the different accounting requirements for production and exploration assets?
• How does the diversity in accounting practices in the extractive industry affect financial reporting and what is the IASB’s response?
• How does IFRS 1 First-time Adoption of International Financial Reporting Standards, apply to extractive industries, what are the first-time adoption rules, and how will this affect your transition?
• How does IFRS relate to asset retirement and costs associated with decommissioning mines as well as restoration / rehabilitation?
• What are the critical compliance issues relating to hedge accounting?
• When are options available for valuing tangible assets (property, plant and equipment) and what are the optional treatments?
• When are options available for valuing intangible assets and what are the optional treatments?
• How are the recognition and measurement rules for impairment applied?
• What are some of the issues specific to mining sector business combinations?
• In what manner are joint ventures structured in the minerals and mining sector?
• Which impact does IFRS 11 “Joint Arrangements” have on the accounting treatment of joint ventures and other joint arrangements?
• What are the external financial reporting requirements for joint ventures?
• Where can relevant accounting guidance for the extractive industry be found under IFRS and US GAAP?
• How are stripping costs in the production phase of a surface mine accounted for?

Learning Objectives

• Understand and apply the accounting and disclosure requirements of IFRS 6 Exploration for and Evaluation of Mineral Resources
• Appreciate the diversity in accounting practices in the extractive industry and the IASB’s project to review those practices
• Apply hedge accounting
• Recognize the relevant accounting guidance for the extractive industry under US and Canadian GAAP
• Understand the options available for valuing tangible assets
• Interpret the complex rules on evaluating assets for impairment
• Complete a smooth transition to IFRS
• Understand the nature and structure of joint ventures in the minerals and mining industry
• Learn the external financial reporting requirements for joint ventures
• Comprehend the mechanisms of financing and reporting the operations of joint ventures
• Appreciate the issues regarding intra-partner relationships, including cost allocation and audits
• Become familiar with IFRS 11 “Joint Arrangements” and its impact on the accounting treatment of joint ventures and other joint arrangements
• Understand the rules of the interpretation IFRIC 20 “Stripping Costs in the Production Phase of a Surface Mine”

Who Should Attend

• CFO's new to the minerals and mining industry
• CFO's of mineral and mining companies in the process of adopting IFRS
• Financial and management accountants in the minerals and mining industry
• Internal and external auditors of minerals and mining companies reporting under IFRS
• Financial analysts seeking to improve their understanding of the accounting by minerals and mining companies

Topics

• Features of the Minerals and Mining Industry
• Accounting Issues in the Minerals and Mining Industry
• IASB’s project on Extractive Activities
• Exploration and Evaluation
• Property, Plant and Equipment
• Impairment
• Decommissioning Costs and Site Restoration
• Joint Arrangements
• Valuation and measurement
• Stripping costs in the production phase of a surface mine
• Resources and reserve statements and other disclosures
• Hedge Accounting
• Selecting and Amending Accounting Policies
• Comparison between IFRS and other national