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  • IFRS Advisory - Natural Resources

IFRS Advisory - Natural Resources

Application of IFRS 9 to the natural resources sector

The origins of IFRS 9 Financial Instruments stem from the global financial crisis and is a very significant standard for the banking sector. Whilst the impact on IFRS 9 is not as great on nonfinancial entities, those in the natural resources sector should not ignore its impacts.

The key features of IFRS 9 to be considered by those in the natural resources sector include:

  • Moving from an incurred loss model to a predicted loss model
  • The strict rules as to which financial assets can be recorded at amortised cost
  • Investments in unlisted shares to be recorded at fair value
  • Simplified hedge accounting rules

See the full report here.

For more information on BDO's global IFRS advisory practice - Click Here


Application of IFRS 16 to Miners

IFRS 16 Leases is the new accounting standard that is likely to cause significant changes to miners’ financial statements. This standard requires miners to recognise most leases on their balance sheet as lease liabilities with a corresponding right of use asset. The profit or loss recognition pattern will change as interest and depreciation expenses are recognised separately in the profit or loss.

Miners often have the following contracts that could be within  the scope of IFRS 16:
• Property and asset rental agreements
• Mining services and construction contracts
• Power supply contracts
• Transportation and shipping agreements
• Contracts for mine camps
• Service agreements which include the use of assets

View the full report here


Video Series

Disaggregation of Revenue - Mining By Wayne Basford


Disaggregation of Revenue - Oil & Gas By Susan Oldmeadow - Hall


IFRS 9 - Loans to Associates & JV Issues - By Wayne Basford


Impacts of IFRS 15 on Revenue Recognition in Mining - By Susan Oldmeadow-Hall


IFRS Issues For The Natural Resources Sector - What Does Control Mean? By Wayne Basford