Extracting value Issue 12 - Resources taxation reform and financial reporting
In this special edition of Extracting Value, we analyse some of the conceptual accounting issues arising from the Federal Government’s proposed Mineral Resource Rent Tax (MRRT) and extension of Petroleum Resource Rent Tax (PRRT).
On 10 June 2011, the Federal Government released for public comment an exposure draft for some aspects of the proposed MRRT legislation, which will apply to all iron ore and coal projects (with some limited exceptions).
The proposed introduction of the MRRT and extension of the PRRT calls into question the interpretation of International Financial Reporting Standards (IFRSs) required by the application of Interpretation 1003 in Australia. It may have other financial reporting consequences at June 2011, including ‘key uncertainty’ disclosure in upcoming financial reports.
With parts of the draft MRRT legislation released (and draft legislation to extend the PRRT pending), the options available under the proposals together with past accounting practices require careful consideration both from an accounting and taxation perspective.
For further information, please refer the attachment below.