IFRS and the mining industry
Top ten accounting issues for Canadian issuers
The transition from Canadian generally accepted accounting principles (GAAP) to International Financial Reporting Standards (IFRS) is set to take practical effect on January 1, 2011. While this transition will be different for every company, particular industries will experience common themes and issues. This viewpoint is based on significant changes in accounting guidance, specific first-time adoption issues, or the extent of data that companies need to obtain and maintain for financial reporting differences.
IFRS and the mining industry: Top ten accounting issues for Canadian issuers sets out Deloitte’s perspective on the IFRS challenges of greatest relevance to the mining sector. At a glance, these include:
- Mineral resources and property, plant and equipment (PP&E)
- Provisions/asset retirement obligations
- Business combinations, consolidation and special purpose entities
- Joint ventures
- Borrowing costs
- Foreign currency
- Financial instruments
- Income taxes
- First-time adoption of IFRS
IFRS conversion can be very complex and will require significant investments in time and resources to implement effectively by 2011. Because adoption of the new standards will affect financial controls, business processes, and the underlying technological support on which your company currently relies, implementing IFRS will require the participation of business stakeholders across your enterprise.
Most likely, your company will need to perform an IFRS gap analysis on your current GAAP-configured accounting systems and identify the IT protocols affected by that change. Issues where enhancements, new processes and controls need to be implemented will also need to be identified. And, finally, you should ensure that the risk of error is minimized.
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