What is an entity required to consider when deciding on its accounting policies for exploration and evaluation activities? Overview. International Financial Reporting Standards (IFRS) – as the name implies – is an international standard developed by the International Accounting Standards Board (IASB). They'll give your presentations a professional, memorable appearance - the kind of sophisticated look that today's audiences expect. Measures the impairment in accordance with IAS 36. Introducing Textbook Solutions. For a limited time, find answers and explanations to over 1.2 million textbook exercises for FREE! A The requirements and guidance in IFRSs dealing with similar and related issues IFRS 1 First-time Adoption of International Financial Reporting Standards sets out the procedures that an entity must follow when it adopts IFRSs for the first time as the basis for preparing its general purpose financial statements. IFRS 9 – Aligns the measurement of financial assets with the bank’s business model, contractual cash flow characteristics of instruments, and future economic scenarios. Without this exemption, it could mean that each individual extraction unit (such as an oil rig) would be treated as a CGU. Subsequent costs incurred during the exploration and evaluation phase should be capitalised in accordance with this same policy. The classification as ‘tangible’ or ‘intangible’, established during the exploration phase, should be continued through to the development and production phases. 2 PwC | IFRS overview 2019 Contents Introduction 4 Accounting rules and principles 5 Accounting principles and applicability of IFRS 6 First-time adoption of IFRS – IFRS 1 7 Presentation of financial statements – IAS 1 8 Accounting policies, accounting estimates and errors – IAS 8 10 Fair value – IFRS … IFRS 6, exploration for and evaluation of mineral resources The impact of International Financial Reporting Standards (IFRS® Standards) has been felt extensively in the exploration industry – particularly the oil and gas industry where key dilemmas and judgements made are greatest at the exploration and production stage. Ind-AS No. Construction Contracts. Exploration and evaluation expenditure might therefore be capitalised earlier than would otherwise be the case under the Conceptual Framework. • Entities that recognize exploration and evaluation assets to assess such assets for impairment. World's Best PowerPoint Templates - CrystalGraphics offers more PowerPoint templates than anyone else in the world, with over 4 million to choose from. The limitation specified in IFRS 6 is that the CGU to which the assets are allocated should not be larger than a segment of the entity. A Entities are required to change accounting policy for expenditure if the change results in more useful information The global body for professional accountants, Can't find your location/region listed? Exploration and development costs that are capitalised are classified as non-current assets in the statement of financial position, and should be separately disclosed on the face of the statement of financial position and distinguished from production assets, where material. Wiley IFRS 2019: Interpretation and application of IFRS standards PKF, Wiley, 2019 IFRS-6 - Free download as Powerpoint Presentation (.ppt / .pptx), PDF File (.pdf), Text File (.txt) or view presentation slides online. Banks may have to take a “forward-looking provision” for the portion of the loan that is likely to default, as soon as it is originated. Japan is working to achieve convergence of IFRS and began permitting certain qualifying Mexico will require adoption of IFRS for all listed entities starting in 2012. Updated by a member of the DipIFR examining team. IFRS 6 is not currently on the work plan of the IASB. Non-current assets held for sale and discontinued operations By; Mohammad Fathi Aouf History of IFRS 5 Date Development September 2002 Project added to IASB agenda 24 July 2003 Exposure Draft ED 4 Disposal of Non-current Assets and Presentation of Discontinued Operations published 31 March 2004 IFRS 5 Non-current Assets Held for Sale and Discontinued Operations issued 22 May … Foreign currencies – IAS 21, IAS 29 17 9. Canada adopted IFRS, in full, on Jan. 1, 2011. IAS 11. Most of the major entities in this sector use the ‘successful efforts’ method, where the costs incurred in finding, acquiring, and developing reserves are capitalised on a ‘field by field’ basis. Details of the amounts capitalised, and the amounts recognised as an expense from exploration, development, and production activities, should be disclosed. IFRS. C Only if the change makes the financial statements more relevant to the economic decision-making needs of users and no less reliable, or more reliable and no less relevant to those needs Subsequently, cost or the revaluation model, as described in IAS 16 and IAS 38. 5/14. It was argued that it was too harsh to force those entities that use capitalisation in their accounts to switch to expensing, even though IAS 38 requires this. IAS 36 specifies that a CGU is the smallest unit for which independent cash flows can be identified. B The definitions, recognition criteria, and measurement concepts set out in the Conceptual Framework This includes a wide spectrum of data that will be used, from historic or current data (e.g. IFRS No. Revenue Insurance contracts – IFRS 4, IFRS 17 19 10. No further exploration or evaluation is planned or budgeted for. Hedge accounting – IFRS 9 15 7.8. IFRS 6 makes limited changes to existing practice. This allows an entity to apply an accounting policy for exploration and evaluation assets which is relevant and reliable, even though the policy may not be in full compliance with the Conceptual Framework. be neutral (free from bias), prudent, and complete. When first recognised in the statement of financial position, exploration and evaluation assets are measured using the cost model. The entity’s right to explore in an area has expired, or will expire in the near future, without renewal. Under IFRS 16, companies will bring these leases on balance sheet, using a common methodology The facts and circumstances indicating impairment include the following: As this type of asset does not generate cash inflows, it is tested for impairment as part of a larger group of assets. About IFRS 16 3 The Group’s lease portfolio 6 Part I – Modified retrospective approach 10. The change must result in a policy that is more relevant and no less reliable, or more reliable and no less relevant, than the previous policy. Consolidated statement of financial position 11 Consolidated statement of profit or loss and . GAAP is established by the Financial Accounting Standards Board (FASB). This preview shows page 1 - 4 out of 7 pages. 1.1 IFRS 16 provides two optional recognition and measurement exemptions: • for short-term leases • for leases for which the underlying asset is of low value. Disclosure – IFRS 7, IFRS 9 16 8. Assets should be tested for impairment if the carrying amount of the asset may not be recoverable. Financial Instruments with IFRS 4 Insurance Contracts. IFRS 6 Ex­plo­ration for and Eval­u­a­tion of Mineral Resources has the effect of allowing entities adopting the standard for the first time to use accounting policies for ex­plo­ration and eval­u­a­tion assets that were applied before adopting IFRSs. On discovery of a commercially-viable mineral reserve, the capitalised costs are allocated to the discovery. Financial Accounting Ifrs Edition Ppt Author: electionsdev.calmatters.org-2020-11-30T00:00:00+00:01 Subject: Financial Accounting Ifrs Edition Ppt Keywords: financial, accounting, ifrs, edition, ppt Created Date: 11/30/2020 6:06:06 AM A decision has been made to discontinue exploration and evaluation in an area because of the absence of commercial reserves. IAS 8. The objective of the disclosures is to provide users of financial statements with a basis to assess the effect of leasing activities on the entity’s financial position, performance and cash flows. Assets recognised in respect of licences and surveys should therefore be classified as intangible assets. C The absence of budgeted or planned substantive expenditure on further exploration and evaluation activities in the specific area Please visit our global website instead. ICHEC Brussels Management School - Site Anjou, Solutions Tutorial 8 Accounting for the Extractive Industries.pdf, IFRS 6 Exploration for and Evaluation of Mineral Resources.pptx, ICHEC Brussels Management School - Site Anjou • ADV FIN GEST S402, University of the Punjab, Quid-e-Azam • IAS MGT, Swinburne University of Technology • BUSINESS acc8005, University College of Bahrain, Saar • FINANCE 422, Lehman on the Brink of Bankruptcy (1).pdf, University College of Bahrain, Saar • MGT 239, University College of Bahrain, Saar • ACCOUNTING MISC. These included capitalising the costs, or writing them off in the same way as research expenses. Without IFRS 6, many entities would have had to change their practice of accounting for these costs. IFRS 6 is an interim standard, and is a short-term solution to the problem of accounting for the exploration and evaluation of mineral resource assets. 3. Short-term leases 1.2 Short-term leases are defined in IFRS 16 as having a lease term of 12 months or less, after the assessment of any options. IFRS 6 therefore deems these costs to be assets. 2. Impairment – IFRS 9 15 7.7. Depreciation Accounting---AS 7. B Entities can change accounting policies as long as the new policy results in information that is relevant and reliable 5.6 Consignment arrangements 156 5.7 Bill-and-hold arrangements 159 5.8 Customer acceptance 161 6 Scope 162 6.1 In scope 162 6.2 Out of scope 163 6.3artially in scope P 165 6.4ortfolio approach P 171 7act costs Contr 173 7.1 Costs of obtaining a contract 173 7.2 Costs of fulfilling a contract 179 7.3 Amortisation 187 6 753 (285) 434 22 924 IAS 17 2018/19 Retail Profit ROU Asset Depreciation Rent Elimination Other IFRS 16 2018/19 Retail Profit Summary of key retail profit impacts – FY 2018/19 (unaudited) On transition to IFRS 16, retail profit is mainly impacted by the elimination of rent expense (for in- scope leases (2) Course Hero is not sponsored or endorsed by any college or university. 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