It focuses on some core reporting considerations for the mining industry, including exploration and evaluation (E&E) expenditure, and impairment and development costs. It provides commentary on their application, and views on current presentation and disclosure practices.
While the publication does not necessarily represent what KPMG might consider to be industry best practice, it provides valuable insights to consider when formulating financial reporting processes.
- Over one-half of the companies capitalised at least some of their E&E expenditure, with remaining companies expensing all E&E expenditure as incurred.
- Differences in accounting policies and disclosures among the surveyed companies highlights the significant flexibility allowed by IFRS 6, as well as the lack of general guidance in all IFRS Standards for mining activities.
- All companies surveyed disclosed an accounting policy for development costs, with 40 percent including a detailed description of which expenditures are considered development costs.
- Companies that recognised significant impairment losses during the period provided more disclosure of assumptions used to determine the recoverable amount for their impairment testing and specifics of their specific impairment loss.
- All companies identified mine closure and rehabilitation as a critical accounting estimate, and recognised a provision for it.