Viewpoints: Applying IFRSs in the Mining Industry

Canada's move to International Financial Reporting Standards (IFRSs) creates unique challenges for junior mining companies. Financial reporting in the sector is atypical due to significant differences in characteristics between junior mining companies and other types of companies. The Canadian Institute of Chartered Accountants (CICA) and the Prospectors and Developers Association of Canada (PDAC) created the Mining Industry Task Force on IFRSs to share views on IFRS application issues of relevance to junior mining companies. The task force's views are provided in a series of papers that are available through free download from www.cica.ca/IFRS. These views are of particular interest to chief financial officers, controllers and auditors.

This series will initially address IFRS application issues related to:

• Functional currency
• Flow-through shares
• Farm-out arrangements in the exploration and evaluation phase
• Exploration and evaluation expenditures
• Impairment of exploration and evaluation assets
• Depreciation: inclusion of additional resources
• Asset acquisition versus business combination
• Production accounting
• Accounting for stripping costs

A separate paper will provide background on different phases of activities of a mining entity.

Publications will be posted as they become available in early May.

Application of IFRSs in Specific Industries

In 2011, the CICA's Guidance and Support Group published 2011 Financial Reporting in Canada under IFRS, which looks at the application of IFRSs from a Canadian perspective by examining and explaining IFRS requirements and illustrating their application. This publication, however, does not provide guidance on the application of IFRSs in specific industries.

The project attempts to fill part of this void by providing guidance on the IFRS application issues that are of particular relevance to specific industries.

Objectives

The objective of the project is to provide guidance on the IFRS application issues that are of particular relevance to specific industries.

Terms of Reference

The terms of reference for the project are:

1. To examine directions and trends in the application of IFRSs in specific industries.
2. To provide guidance on the IFRS application issues that are of particular relevance to specific industries.
3. To illustrate the application of IFRSs in specific industries through the use of extracts from annual financial statements that are in compliance with IFRSs.