IFRS for the Minerals and Mining Sector

The programme

Programme overview

There are diverse accounting practices among companies in the worldwide extractive industry. To provide guidance and a transition path for entities in the extractive industry adopting IFRS, the IASB issued IFRS 6 Exploration for and Evaluation of Mineral Resources in December 2004. The Standard applies to expenditures incurred in connection with the exploration and evaluation of mineral resources.

This course summarises the accounting and disclosure requirements of IFRS 6 and discusses the outcome of the IASB’s work on accounting for extractive activities. Key accounting standards that affect the industry are also given in-depth coverage, such as IFRS rules on impairment of assets, recognition and measurement of assets, revaluations of certain qualifying assets, decommissioning and site restoration costs, accounting for reserves, disclosures, and hedge accounting. The programme also provides guidance on accounting issues relating to joint ventures and production sharing agreements and includes an overview of the interpretation IFRIC 20 ‘Stripping Costs in the Production Phase of a Surface Mine’.

This course answers questions such as:

• What are the accounting and disclosure requirements of IFRS 6 Exploration for and Evaluation of Mineral Resources?
• What are the different accounting requirements for production and exploration assets?
• What was the outcome of the IASB’s review of accounting practices in the extractive industry?
• How does IFRS 1 First-time Adoption of International Financial Reporting Standards apply to extractive industries, what are the first-time adoption rules, and how will this affect your transition?
• How does IFRS relate to asset retirement and costs associated with decommissioning mines as well as restoration/rehabilitation?
• What are the critical compliance issues relating to hedge accounting?
• When are options available for valuing tangible assets (property, plant and equipment) and what are the optional treatments?
• When are options available for valuing intangible assets and what are the optional treatments?
• How are the recognition and measurement rules for impairment applied?
• What are some of the issues specific to mining sector business combinations?
• In what manner are joint ventures structured in the minerals and mining sector?
• How are stripping costs in the production phase of a surface mine accounted for?
• How do sustainability-related disclosure requirements (IFRS S1/S2, GRI 14) now interact with traditional financial reporting for mining companies?

Who should attend

Who is this programme for?

• CFOs New to the Minerals and Mining Industry
• CFOs of Mineral and Mining Companies in the Process of Adopting IFRS
• Financial and Management Accountants in the Minerals and Mining Industry
• Internal and External Auditors of Minerals and Mining Companies Reporting Under IFRS
• Financial Analysts Seeking to Improve Their Understanding of the Accounting by Minerals and Mining Companies

Learning outcomes

What you will learn

• Understand and apply the accounting and disclosure requirements of IFRS 6 Exploration for and Evaluation of Mineral Resources
• Understand the outcome of the IASB's concluded review of extractive industry accounting practices
• Apply hedge accounting
• Understand the options available for valuing tangible assets
• Interpret the complex rules on evaluating assets for impairment
• Complete a smooth transition to IFRS
• Understand the nature and structure of joint ventures in the minerals and mining industry
• Learn the external financial reporting requirements for joint ventures
• Comprehend the mechanisms of financing and reporting the operations of joint ventures
• Appreciate the issues regarding intra-partner relationships, including cost allocation and audits
• Become familiar with IFRS 11 ‘Joint Arrangements’ and its impact on the accounting treatment of joint ventures and other joint arrangements
• Understand the rules of the interpretation IFRIC 20 ‘Stripping Costs in the Production Phase of a Surface Mine’
• Understand how IFRS S1/S2 sustainability disclosures and the GRI 14 Mining Sector Standard now interact with traditional financial reporting

Explore the programme

Detailed programme outline

• Non-renewable reserves
• Scale of capital investment
• Pattern of cash flows
• Risks
• Variety of business structures
• Challenge of representing the mining industry in a context of historical cost accounting
• Disparity between cost and value
• Exploration: capitalisation vs. expense
• Full cost vs. successful efforts
• Fixed assets
• Capitalised costs
• Impairment
• Resources and reserve statements and other disclosures
• Reserve definitions and disclosures
• Use of reserves in accounting
• Other disclosures
• Examples of published disclosures
• Background: objectives of the IASB's Extractive Activities research project
• Outcome: the project concluded at the Board's September 2023 meeting, with the decision to retain IFRS 6 in its current form rather than replace it — diverse accounting policies for exploration and evaluation expenditure will therefore continue to be permitted in practice
• Role of the IASB Framework for the Preparation and Presentation of Financial Statements
• Recognition and measurement
• Reclassification
• Disclosures
• Full cost accounting
• Successful efforts accounting
• Asset categories
• Directly capitalised vs. transfer from exploration and evaluation
• Depreciation, depletion and amortisation
• Capitalisation of borrowing costs – IAS 23
• Cost model vs. revaluation model
• Why is impairment an issue for the minerals and mining industry?
• General rules for impairment testing
• Cash generating units
• Recognition and measurement of impairment losses
• Reversal of impairment losses
• Recognition of liability
• Changes to decommissioning liabilities – IFRIC 1
• Worked example
• Commissioning and production
• Depreciation (IAS 16, IAS 38)
• Stripping costs in the production phase of a mine (IFRIC 20)
• Revenue (IFRS 15)
• Taxes (IAS 12)
• Leases (IFRS 16)
• Overview of IFRS 9 classification and measurement (superseding the previous IAS 39 approach)
• Expected credit losses
• Risk management in the minerals and mining industry
• Hedge accounting
• Practical issues
• Business combinations (IFRS 3)
• Control and consolidation of subsidiaries (IFRS 10 and IAS 27)
• Significant influence and equity accounting of associates (IAS 28)
• Joint control and equity accounting of joint ventures/proportionate consolidation of joint operations (IFRS 11)
• Step acquisitions
• Step disposals
• Other common group and consolidation issues in the mining industry
• Disclosures (IFRS 12)
• IFRS S1 (General Requirements) and IFRS S2 (Climate-related Disclosures): now being adopted across major listings including the JSE, ASX, TSX, and LSE, with mandatory climate-related financial disclosures ramping up
• GRI 14, the Mining Sector Standard, effective globally from 2026
• How sustainability disclosure is converging with traditional financial reporting, and what this means for mining company disclosures going forward
• Knowledge of basic accounting under any national standards. No advance preparation is required for this course.

Learning approach

How you will learn

Our diverse instructional approaches ensure effective learning:

– Lectures & Presentations: Engage with expert-driven, stimulating content.– Course Material: Access well-crafted supporting resources.– Group Work: Collaborate on discussions and case studies for practical insights.– Workshops & Role-Play: Participate in immersive, scenario-based activities.– Practical Application: Focus on applying theoretical knowledge in real situations.– Post-Training Support: Receive extensive support after training for skill implementation.

Discuss your requirements

Dates, duration & arrangements

Contact Ratomac to confirm dates, duration, delivery format, entry requirements and any applicable assessment or certification before booking.